Buying a first home is always a huge decision. It’s even bigger when the market has been as hot as it has in the last two years.
Financial advisors say this could be the worst market for home buyers we’ve ever seen, and caution clients to perhaps wait.
Certified financial planner Rick Kahler, founder of Kahler Financial Group in Rapid City, South Dakota, expected the coronavirus pandemic might cool down a real estate market that had been rising for the last decade.
“I told a client 18 months ago not to buy a home, but he did,” said Kahler, who lives in Rapid City. “I was dead wrong, of course.”
Not only has the pandemic failed to cool the hot housing market, it has kicked it into higher gear. At the end of September, the average home price in the U.S. was $377,000, according to real estate broker Redfin. That’s up 14% from the same month last year and a staggering 30% from September 2019, when the average selling price for a home was $291,000.
Current homeowners are in the catbird seat. If they “overpay” for a new home, they can make up for it by selling their old one. For first-time homebuyers, however, it’s a different story.
“This could be the worst market for a first-time homebuyer that I’ve ever seen,” said CFP Sheryl Garrett. “Don’t be in such a hurry to buy a house.”
Garrett, founder of the Garrett Planning Network, suggests that some people are driven to own a home for the wrong reasons.