(NEXSTAR) — The U.S. has seen a hot housing market in recent years but for some, especially first-time homebuyers, the market has been too hot.
Amid high price tags and homes that sell fast, many have been waiting for the Federal Reserve to cut interest rates, thereby lightening the burden on borrowers, but it hasn’t happened quite yet. Meanwhile, spring is fast approaching and with it, there’s a chance for stronger buyer demand.
In addition to watching the market and imagining your dream first home, you may be seeking out (or receiving) advice, unwanted or otherwise. While some may be worth adhering to, like looking for a home that you can see yourself spending a few years in, other tips from your parents or grandparents may not be as effective today as it was years ago.
Some of that has to do with how home buying has changed.
“Like so many aspects of life, so much more of the [home buying] process is done online these days,” Danielle Hale, chief economist for Realtor.com, tells Nexstar.
“COVID changed the game, in many ways for the better,” Chris Varsek, the lead real estate agent with The Varsek Team in northern Illinois, tells Nexstar. “Home buying is much smoother, houses are easier to view with online capabilities, and financial tools make it a snap to understand the total picture when it comes to buying a home.”
It’s that latter aspect — knowing how much you can afford and shopping in your budget — that is important to keep in mind regardless of the market, Hale says.
So what home buying advice can you politely avoid?
First, you don’t need to stay in your first home forever. While Hale says studies have shown those who buy a house earlier tend to accumulate more home equity relative to the purchase price, you need to consider how long you’ll stay in the home.
“With job and personal changes a regular fixture for many in their twenties or even thirties, buying as soon as you can is blanket advice that might not be good for everyone,” she explains, adding that homebuyers “should plan on living there for 5-7 years to recoup [home buying] costs.”
As you shop around, you may be encouraged not to buy the first home you look at. Varsek warns against adhering to that suggestion, calling it “terrible advice.”
“What if the first house you look at is the best fit for you, but you passed on it just because you went there first?” he says, explaining that in addition to knowing your budget, it’s important to know what “home” means to you. “When you find the house that fits that vision – buy it!”
Varsek also encourages anyone looking to buy a home to go through a buyer consultation with a realtor. During this process, your realtor can explain how the real estate market works, the contracts used, and more about the overall home buying process.
When it comes to actually purchasing a home, you may have been told you need 10% to 20% for a down payment. However, Hale notes some home buyers can find a mortgage down payment as low as 3.5%, or 0% if they qualify for loans like the veteran’s administration guaranteed mortgage.
Home buying also doesn’t have to be a complicated process.
“Buying a home is not always about offering the highest price, rather it’s crafting an offer that best meets the needs of the seller,” Varsek says.
If you’re hoping to buy your first home, or simply move, this year, experts say the housing market should be better in 2024 than 2023, but it likely won’t return to the low rates we saw in 2020 and 2021.
The Associated Press contributed to this report.