Geopolitics and inflation have taken some of the sparkle off this year’s prime home buying and selling season. Still, it hasn’t stuffed consumer demand even when combined with the super-low inventory and rising prices.  

IS IT A BAD TIME TO BUY? 

 The economic fact is there is never a bad time to buy a home. Sometimes are better than others, but property ownership continues to be a worthwhile investment that provides shelter and a hedge against inflation. Yes, interest rates are coming off their record lows. But compared to the historical average of 7.5%, what’s now available is still a bargain.  

BUY OR RENT? 

There are times when it makes sense to rent. Sometimes it’s a bridge between one home and another, for those who won’t be in one place very long. It’s a short-term option because over time mortgages can be paid off. But the rent goes on forever and builds wealth for the landlord, not the renter.  

YOU DO NOT NEED A 20% DOWNPAYMENT 

Down payments vary. The current typical for a median-priced home here in the Tri-Cities is 6% and 6.7%. Down payments in the Kingsport-Bristol metro area were higher in Attom Data Solutions’ current analysis. The reason 20% is cited so often is that’s the cutoff for private mortgage insurance (PMI), which adds to the monthly mortgage payment. Once the home is purchased and builds 20% equity, owners can call the mortgage company to remove the PMI or just refinance. And there are programs to help reduce or eliminate the down payment. Savvy consumers spend some time researching state and federal programs that offer help to a variety of home buyers. 

BUYING A HOME DOES NOT HAVE TO EQUAL HEAVY DEBT 

If you focus on the amount you own, it can be overwhelming. But not all debt is bad. Make sure you can afford your monthly payment and that you are not “house poor.” Take into consideration all monthly expenses, not just the ones you report to the lender on the application. In the months you have a little extra money, add it to the mortgage payment. It cuts the life of the mortgage significantly over time and that monthly mortgage payment earns buyers equity in the home. Equity is a financial asset the buyer can use to pay off debt, use for a down payment on a step-up home purchase, or even buy a second home. 

YOU DO NOT HAVE TO HAVE PERFECT CREDIT 

Credit scoring plays a significant role in real estate purchases, but it does not mean a not-so-squeaky-clean credit history is a deal-breaker. There are many solutions and programs for buyers who have a less than perfect credit score. Buying a home can boost the buyer’s credit and help create a stronger financial position for future credit scoring. 

Today’s market is not as accommodating to buyers as it was a couple of years ago. Still, it is not a bad time to buy for those who have done their research then partner with a professional Realtor® to help them explore the opportunities. 

NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee, Southwest Virginia region, representing over 1,500 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries. Weekly market reports and information for both consumers and members is available on the NETAR website at https://netar.us