The real estate market always ebbs and flows, but over the last few years, it has gone through a lot of change. As interest rates have risen and house prices have fallen, 40 per cent of homebuyers are now sitting on the sidelines, waiting to see what happens next and wondering: When will be the right time to buy?
Buying a home is a big commitment — financially and emotionally. Naturally, you want to time it just right. While home values and mortgage rates are important metrics, they shouldn’t be the only drivers of your purchase decision as they’re almost impossible to predict. Instead of “timing the market,” it’s wise to time your home purchase according to what’s best for you.
Here are indicators that it might be your ‘right time to buy.’
You need more space
If you have a growing family, your ‘starter’ home or rental may not give you enough room anymore. Do you find your space too cramped for comfort? It may be time to look for a new home.
Your rent rises
If you’re currently renting your home, apartment or condo, and the cost of rent keeps increasing, it may be worth looking into whether it’s time to direct those dollars into building equity in your own property. You can use the RBC Rent or Buy Calculator to see what your rent payment would equal in terms of a mortgage amount.
You’ve gone through a life event
If you’ve recently gotten married, divorced, had a child, sent a child off to school or gone through a major career change, your current home may no longer be the right fit. Maybe you need to downsize as your children have left the nest. Maybe you’re working from home and need a dedicated office your current home doesn’t have. Or, you’re approaching retirement and want to lower your housing costs or find a home that meets unexpected mobility limitations. When life changes, having the right space can help you adapt and love where you live.
Your dream home has come on the market
Some neighbourhoods are tough to get into — whether it’s in a highly desirable school district, known for its great value or fantastic walkability to shops and restaurants. If you’ve had your eye on a particular street or area and a property becomes available, why not pursue it? Getting caught up with the state of the market could mean missing out on your dream home.
You can afford to
The best approach to deciding when to buy a home is to do it when you can afford it. Rather than looking at external factors, determine when the time best aligns with your financial situation. It’s a good idea to seek advice from a lender who offers pre-approvals and firm approvals with 120-day rate guarantees — competitive mortgage rates and flexible products can boost affordability too.
The best time to buy a home is when it’s best for you. When interest rates are rising, it may not seem like a good time to buy, but consider that when interest rates go up, home prices tend to fall.
Whether you’re looking to buy your first home or your next home, start by finding out how much you can afford with the RBC True House Affordability tool. Get an estimate in just 60 seconds.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.