Is there a better or worse time to buy a home? If you’re in the market for one, then you may be asking yourself that question. The answer to that is, yes, there is, and one of the factors that determine that is the unemployment rate. More specifically, mass unemployment plays a significant role in the housing market and on mortgages. This blog post covers what you need to know about how mass unemployment (and other factors) can affect your mortgage so that you can make an informed decision when you’re ready to buy a home.
The Short of It
According to Business Insider, a thriving economy means higher rates on mortgages. When the unemployment rate is high, then it stands to reason that the economy isn’t thriving, and rates for mortgages tend to go down. If you’re looking for the cheapest rates when it comes to your mortgage, then buying during a period of mass unemployment might be a good way to go if price is your sole consideration. If you are fortunate enough to afford a home during times of mass unemployment, then take advantage of that timing.
What to Watch Out For
As with all things, low rates don’t last forever. While it’s tempting to shop around for the best deals, don’t take too long to decide. It’s best to keep an eye on the job market, because while mortgage rates may take a plunge during high unemployment periods, they’ll shoot up once employment gets steady. That is to say, if there’s a good jobs report now, then you can expect the rates for mortgages to shoot back up over the next couple of months.
It isn’t just the unemployment rate that affects mortgages. There is a seasonality to home-buying as well, according to House Logic. From a price standpoint, it’s usually least expensive to buy a home in the winter time. However, the inventory of available homes in your town may drop as the temperatures drop. This means you must be patient and be willing to wait to find a good home for you. Spring and summer are the busiest times for real estate, so purchasing either right before or right after these seasons can be to your benefit.
Location, of course, still plays a big role in the price and availability of homes in your area. Many families with school-aged kids seek out homes near good schools and community services. That said, there are ways around some of these factors. For example, if you work at home or homeschool your kids, then you open yourself up to more options because you aren’t so location-dependent. This may open up homes to you that come with affordable price tags and many, if not all, of the amenities you need.
The rate of mortgages depends on a number of factors. Mass unemployment rates play a huge role in how much you’ll pay for a mortgage, but this isn’t the only factor affecting rates. The time of year you buy and the location you want also matter. In most cases, it pays to shop around and to employ the services of good real estate professionals in order to get the best deal. Talk with a mortgage lender to get advice when it comes to the best time for you to start shopping for a home.