Knowing the best time to buy a home may not be simple – few big moves in life are – but you can get a good idea of the right timing by looking at both your financial situation and market conditions.

Your Income and Debt Are in Order

Unless you’re sitting on considerable liquid assets, a steady and stable income is a must when you’re thinking about buying a new home. So no big risky job changes. And what’s your debt-to-income ratio? You should know. The rule of thumb is 28/36: all housing costs (including taxes, insurance, and more) shouldn’t be more than 28% of your gross monthly income; all debts shouldn’t be more than 36% of gross income.

Today’s Mortgage Rates and Where They’re Headed

Anyone who is considering a home loan is likely aware of the recent rise in mortgage rates, which have inched up from their historic rock-bottom lows of the recent past. While nowhere near the historic highs the U.S. has seen, these increased rates have caused a ripple effect in the housing market. Inflation has also had an impact. Though many financial experts believe the final months of 2022 will be far less tumultuous than the year’s start. Inflation appears to have reached its peak and many economists predict that the rate for a 30-year fixed mortgage will hold steady between 5% and 6% for the rest of the year. Depending on your scenario that could mean that now is a good time to buy. Should the rates drop in the future, there’s always refinancing.

The Current Market and Housing Supply

As contradictory as it may seem, the recent rise in rates is not bad news for many buyers, as the change has cooled the market. Less competition means more supply and a tamping down of bidding wars that cause home prices to spike in red-hot markets. Nationally, home sales have declined and top economists predict that home prices will follow in the near future.

We’re seeing just such a shift in the sellers’ market of late in the Dallas-Fort Worth area. According to the Dallas Business Journal, this summer the DFW area saw a jump in buyers backing out of contracts for new home builds. Statewide, a rising trend reversed in June 2022, with an overall decline in new home sales.

And when the time to buy a home is right for you, the right lender is ready. So connect with the Decker Group at First United Bank Mortgage online or call us at (972) 591-3097.