Buyer's Blog Update 6/1/2021
Reasons to Buy a Home
Note: The term “you” refers to an individual, a couple, or a family.
- You have found a community that you want to establish roots or have established roots.
- Your family size or household size changes.
- The type of home that you need changes.
- You want a hedge against inflation through buying a property with a fixed-rate mortgage.
- A new job or promotion requires a move.
There is one question that you should seriously answer before proceeding. Do you want to buy a home because everyone else is buying? You could be setting yourself up for failure if the answer is yes. A common theme to housing booms and busts is that a herd of buyers hear about success stories from friends or read articles and do not want to be left out of the party. Fear of missing out has caused financial ruin for some.
If your reasons for buying are solid, then buying during one of the market peaks does not become a personal crisis if the market turns south. In 2009 and 2010, Tim and Tracey’s Kailua house was worth $200,000 less than the amount they purchased it for in 2004. The market value of the house had no bearing on their financial situation or family situation. The house was perfect for raising their middle school aged children and was a ten-minute commute to both their kids’ school and their office. The mortgage payment had not changed over the past five or six years and their salaries comfortably covered the monthly obligation.
Identify the reasons you want to buy a home before proceeding. If those reasons depend on the whims of the real estate market, then think twice before taking the plunge.