Best Years for First Time Home Buyers: 2011 – 2014

The United States is in a state of recession. Houses are harder to sell than before – at least for a profit – and many people are finding the pressure to be mounting with no near end in sight. However, for those who do not currently own homes, but are looking to, this is a time of great opportunity.

While people do not necessarily want to benefit as a result of the misfortune of others, coming first time home buyers will not be in a position to overpay for a home, nor should they. After all, when items are on sale, benevolence does not include padding the price to make people feel better, especially if the purchase is a short sale.

Window for Ideal Home Buying Opportunities

According to a January 21, 2011 article in the American Press, home sales have hit a low that has been unseen in modern data. Adding to this is that during the housing boom, builders had built too many residences, resulting in more homes being built and foreclosed upon than people cared to buy. Add to this a recession with people having less money to spend, and it is very reasonable that a recovery is going to take a few years.

For these reasons, the ideal window for people who do not own a home but would like to is from now until 2014. The years after will not be bad for home buying either, but those who buy during this window and pay down the mortgage diligently will encompass a group of middle class and wealthy retirees who found that buying a home was a significant part of their success.

Buying a Short Sale

One way to buy a home is through a short sale. This is when a home owner is under water in his or her mortgage as a result of either careless lending or market fluctuations. Home owners do not want to be foreclosed upon, but the bank holding the note has the final say in whether or not the sale goes through for the offered price.

Home Buying Should Still be Frugal

One thing that may be tempting is to purchase a home that is a bit of a reach on price. After all, the value should go up, right? That is often what got the sellers in the position they were in. They either bought at the top of the market or they refinanced to pull money out for lifestyle costs, or to make up for having lost some income.

The key to being a successful homeowner is to have a house payment that is no more than 25% of one’s take home pay. This will allow enough room to save for home repairs/updates/remodels, and it will also allow for couples to go out on dates, and families to go on vacation.

When costs exceed 25%, owning a home can become a nightmare of mounting consumer debt, the need for a second job, and worries about saving for college, or the lack thereof.

Related articles:

Rules of Thumb for Home Buying

Zero Point Mortgages

The Dangers of a 50-year Mortgage