You need to be ready to buy when the market shifts.
We still have an inventory crisis, and that will keep the market from crashing. Pricing will continue going down as long as the interest rates continue to climb. As soon as inflation is back under control, they will drop the rates again. When they do, you want to be ready to buy so you can enjoy the climb and build wealth.
What do you need to do to be a ready to buy? Here are the 4 things I would focus on to best position yourself for a future purchase.
Save your money.
Youâ€™ll need a downpayment and the more money you can put down, the better the house will be. Set aside a percentage of every paycheck, somewhere you canâ€™t touch it, and let it build up as much as you can. If the bulk of your money is tied up in investments, Iâ€™d pull it and hold the cash so the stock market isnâ€™t deciding how large of a downpayment you have. Of course talk with your financial advisor about this strategy, but stocks are also predicted to continue declining.
Pay down your debts.
Your debt to income ratio is a huge part of being able to buy a house. Start with paying off your smaller debts and then wrap those payments into the larger debts. This will put yourself in as strong a position as possible.
Work on your credit score.
This will improve naturally as you pay your debts down. You also want to make sure you stay up to date on all your payments and remove any past delinquencies that may still be showing up. Free credit report sites can give you a quick overview, but for a better look Iâ€™d head over to one of the actual reporting agencies.
Hone what you want to buy.
Once interest rates come back down, there will be a frenzy again because we donâ€™t have any inventory. Knowing exactly what you want to buy will put you in the best position to immediately jump on it when it comes on the market.
This market is different than anything we have ever seen before, and as such we are all learning something new everyday. If it were my money, Iâ€™d be buying homes as soon as the interest rates hit 5.5%. If you want to talk about a buying strategy, or what this could mean for you, please reach out!
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