I’m reading through some posts from potential homebuyers and it’s understandable why they feel stressed. It would take up 50-60% of take-home pay to cover mortgage and other housing expenses, and that’s a lot to commit to. It’s not unrealistic to expect higher incomes, parents to help out with new babies, and a commitment to being frugal and not traveling. But I’m having a hard time understanding why people would take so much risk with the economy and interest rates so high.
I get that there was a bidding war last year that allowed people to lock in extremely low rates, but now those rates have almost doubled. People are stretching their budget to the max to accommodate that, just because of the low inventory. But this has been going on for a few years now, it’s not something new. The right house in the right time will come eventually.
I see a lot of people saying that it’s worth it to take the risk and buy the house, otherwise you’ll be priced out while saving, and that the job market is strong. I also hear people saying that home assets are a great thing to hold onto during hyperinflation, and that the government will have forbearance programs to help homeowners in the event of unemployment. The only situation that makes sense to me is when renting is equal to or twice the cost of buying.
It’s important to remember that you don’t want to buy a house that you can’t afford. Make sure you look at your budget and make the best decision for your current financial situation.