A common theme that I am getting from clients these days is that they are concerned about the sky rocketing home prices. Most people want to purchase their homes but they are worried about a bubble and a potential crash in the future. They are considering waiting until home prices come down a bit but also have FOMO (Fear Of Missing Out), they do not want to miss out on appreciating home values. They see people buying homes and seeing a significant rise in values in a very short period of time. Here are things to put into consideration not to over pay for your home.
Average price of a house in Houston area has reached $292,000, while the median home price has reached $254,000
The biggest factor in determining what’s going to happen in the market is the income factor. Average household income in the Houston area is $59,581 and it is slowly trending down and the median household income in the Houston area is $47,010
This puts the median household monthly income at about $4,000 and the median mortgage payment (PITI) at $2100
A primary home is not an investment, it’s an asset. It’s not even an investable asset but a lifestyle asset. So in order not to overpay, take the following into consideration
Consider your personal affordability.
Consider the worst case scenario and plan for it…What if I lose my job for up to 6 months, do I have reserves to take care of my expenses?
Do not exceed 40% Debt-To-Income ratio
If your home value fell by 20% and you had to sell, could you afford to sell?
Can you still save 10% of your income even with your mortgage? You always have to save for emergencies and for pleasures
Realize that no one can time the market, no one can buy at the bottom of the market and sell at the height of the market.
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At your service,
Victor Lofinmakin
“Obsessed with Service”
2016 Top 20 Under 40 Realtor
Fairdale Realty
832-788-1782
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