Should I buy a house now or wait?

Question

Hello everyone

I’m 25 years old. Have a wife and a daughter(2years)

Me & wife we’re talking about buying a home.

Should I buy now or wait to see how the economy will play out? Is the houses prices going down? I’m in Southern California. First time buyer.

Aaron K. · Answer

@Josue Gudino if you plan on living in the house, you can afford it and have a stable job then now is a perfectly fine time to buy, because it doesn't matter if it goes down 5% because you wouldn't sell anyway.  Trying to time the market with a primary residence can have you missing out later down the line if prices rise and you can no longer afford your desired location.

Anthony Ybarra · Answer

@Josue Gudino

I am in Riverside and I house hack a 4 unit, I still see 2-4 unit properties pop up that can be purchased with an FHA, with a little sweat equity and bringing the rents up will allow you to live with little to no money out of your pocket every month. I personally think this is the best way to get your feet in the game in SoCal and buying a SFR for your first purchase is not going to get you a good start to the ultimate goal of financial freedom unless you plan to rent out some of the bedrooms but with a family that’s hard. I also have a wife and a 4 year old and 3 dogs.

Anthony Ybarra · Answer

@Twana Rasoul @Josue Gudino

I agree and to add to that self sufficiency rule, we ran into that being an issue and had to put about 10% down instead of the 3.5% but it’s still lower than 20-25% down on an investment property.

I’ll try to explain it the best I can for our property. When the appraiser came out, he estimated what the combined market rents would be on the appraisal, in our case $3550/mo. The FHA guidelines say that your mortgage has the be 75% or less of the combined market rents. In our case our mortgage had to be $2662/mo or less and we were at I think $2800-$2900/mo at 3.5% down payment. So with 10% down payment it brought our mortgage just under $2650/mo.

Twana Rasoul · Answer

@Josue Gudino @Anthony Ybarra Not bad at all, it is great that you were able to get the loan to work at only 10% down.  The self sufficiency test only applies to 3 and 4 unit properties, not 2 unit.

Anthony Ybarra · Answer

@Anthony Ybarra

I don’t think the self sufficiency rule applies to a duplex though, just 3-4 unit FHA

Marlen Weber · Answer

@Josue Gudino if you will be there long term and it will be a "forever home" investing now would not hurt.

Twana Rasoul · Answer

@Josue Gudino  inland of Southern CA I would say hold off for a little while longer and see what happens but definitely don't stop looking.  If any part of SoCal would get hit disproportionately it would be the the areas of San Bernardino, Riverside and Imperial

Twana Rasoul · Answer

@Josue Gudino   @Anthony Ybarra  If you are willing to do what Anthony is doing and house hack a 4plex with an fha loan (assuming it meets the self-suffiency requirements for the loan to approve) then definitely go for it and as rates are less than 3% currently and to cut your cost of living it is a great way to go.  Just plan on holding onto it for long term.  I house hack a multifamily with my family as well.  But I'll still say if you are planning on buying an SFR only then you might want to hold off for a just a little while.

Should I buy a house now or wait?

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