As a potential new homeowner, there are a lot of major decisions that need to be made during the homebuying process. From deciding how much to put down, whether buying is really right for you, and how to choose the best home, stress can quickly arise. Learn everything there is to know about the homebuying process, including how to choose your next home, to alleviate some of this anxiety.
How Expensive is the Average Home?
First and foremost, the housing market has been turbulent in recent years and prices have been rising like never before. In fact, the average median home price in the United States is now $428,700, which is a 30% increase from 2020 alone. With the average first-time buyer down payment percentage being around 6% of the home’s value, this means a buyer needs to come up with $25,722 for a median priced home in the U.S.
Renting vs. Buying: Which is Better?
Given the expensive price that’s associated with houses nowadays, many potential buyers play around with the idea of renting their first home instead of making a purchase. The main benefits to renting include having the flexibility to pick up and leave, typically lower rent payments, and the fact that maintenance jobs are not your responsibility.
However, a home buyer has the ability to build equity in their home over time. This refers to the portion of the home that the buyer actually owns. On a $1,000,000 home, for example, where $500,000 has been paid off by the buyer, that person has built 50% equity. On top of building equity, a homebuyer also gains certain tax advantages, can build their credit, and has the ability to personalize their home. In a long-term comparison, buying a home is almost always better than renting.
5 Factors to Keep In Mind During the Home Buying Process
As you start to examine homes for sale in Sun City Hilton Head, there are a variety of factors that a person needs to keep in mind. The most prominent five factors include:
- You will need to make a significant down payment
While 6% may be the average down payment for first-time buyers, it doesn’t mean it’s the best. The more you are able to afford with your down payment, the lower your loan principal will actually be. Additionally, you will already have substantial equity if you can make a larger down payment.
- Think about the location of the home
When it comes to real estate, location is everything. Consider how close a property is to schools, restaurants, shopping areas, and other items that are important to you. Looking further down the line, the location of a home you are considering living in will also factor into resale value should you ever decide to move in the future.
- Consider the current age of the property
Remember that older homes will inevitably require more maintenance than newer homes. While an older home may come with a far lower price tag on the surface, the headaches that come from having to spend thousands of dollars on renovations and other similar tasks may not be worth that price.
- Evaluate how long that home will suit your needs
For those who are younger couples, consider the size of the home you are currently looking at. While a smaller home may come at a lower price, it’s possible you may be considering starting a family in the near future. This means a larger house would be necessary and, making the decision to purchase one now can save you time down the line.
- Examine the current state of the economy
Finally, making the decision to buy a home should be done only after factoring in certain economic conditions. Most notably, look at the current state of the housing market, job market, and other factors to gauge the overall economy. Making the choice to purchase a home on a downward facing economy can be dangerous, so avoid digging yourself inot a hole.
The Bottom Line
Whether you’re a first-time buyer or an experienced house flipper, finding the best deal on a home is always important. As you begin to look at the various home available on the market, remember that each one of those could potentially be your home for the rest of your life. It’s always best to keep this viewpoint in your mind so that you make the smartest purchase decision possible. Evaluate all the factors you need from a home in order to find one that meets your dreams.
