How Do Renters Know When They’re Ready To Buy A Home?

When the National Association of REALTORS® asked homeowners in their 20s and 30s why they bought a home when they did, the majority said: "It was just the right time."

June 09, 2020 by Dan Green

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How do renters know when it’s time to stop renting, and start looking for house to buy? A National Association of REALTORS® survey of recent home buyers offers some pretty good clues.

The trade group’s annual Home Buyer and Seller Generational Trends Report asked new homeowners in their 20s and 30s what was their number one reason for buying a home when they did.

Close to 60 percent of recent home buyers said their number one reason for buying a house was that “it was just the right time.” By comparison, only 6 percent said they bought because “mortgage rates were low”.

The study disproves the idea that falling mortgage rates lead to higher levels of homeownership. As it turns out, mortgage rates are hardly connected to homeownership at all.

Buying a home is more of an emotional or life-based decision than a financial one – even when the financials look great.

At today’s mortgage rates, a $219,000 mortgage comes with a monthly payment near $1,000 . That’s about the lowest in recorded history.

But, if interest rates were higher, would an extra $50 or $100 in your payment per month keep you from homeownership? Probably not, according to the National Association of REALTORS®.

However, the emotional reasons to buy are harder to ignore.

  • A single home buyer who wants to stop renting
  • A couple who wants a joint home to start their life together
  • A family who’s outgrown their rented home and want to move into something more permanent

When your goals aren’t financial, low interest rates don’t make you move – your emotions do. You follow your instincts to stop renting, then you find a way to make your finances work.

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