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Ask HN: Is it a good time to buy a house?

8 points by throwawayaug ↗ HN
We are contemplating purchasing a house as our primary residence. We have been life long renters but fortunately now in a position where we can afford the downpayment and monthly mortgage even at the current higher rates. However the macroeconomic numbers and tech layoff news are making me uncomfortable. On the flip side the house prices have come down ~20% in my city. The prices might go up and outprice me from purchasing a house in a desirable location. Am I making a hasty decision in the current market?

14 comments

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themodelplumber
We are looking at important MA breaches, an inverse H&S on the S&P (maybe), and potential/ongoing melt-up scenario in markets right now.

You are right to wonder how things will go, because everybody's wondering. You may indeed miss out on big moves if you wait. But also maybe things will stall out and take forever to move up again.

I'd go to localized specifics in your scenario. I'd look for comparative value in a specific home purchase, compare to averages or moving averages of prices _in your area_ and then decide what's a good value from opportunity to opportunity.

Identify your buy-in range, make some offers, see how things go. But I'd keep it very specific and buy something you like at what seems like a good price, all things considered.

I'd stay away from trying to call macro trends because there's not much traction there right now. It could help to look at historical price action in your city though.

newaccount2021
you're overthinking it and drowning the discussion in jargon

its very simple - rates are higher, they are going higher still, and they are going to stay high

homes will be a minimum 20% cheaper in 18 months

the Fed is completely focused on reducing asset prices, and they have the tools to produce the outcome they want

DontchaKnowit
Yeah ill believe it when I see it. When eggs double in price in 2 weeks, its hard to believe houses are going to decrease in price over 18 months.

Maybe in real terms when accounting for inflation but the actual dollar value seems destined to go up in spite of interest rates

Kon-Peki
> When eggs double in price in 2 weeks, its hard to believe houses are going to decrease in price over 18 months

There’s a global avian flu pandemic going on, the worst ever seen. More than 100 million chickens dead. This has almost nothing to do with fiscal policy.

DontchaKnowit
understood but eggs are unique only in the magnitude of the price increase. Every other product under the sun has seen and is still seeing inflation currently. Why would home prices go down in those conditions?

Where I am, it is STILL damn near impossible to get a house bought and that is after enormous increases in interest rates over the last couple years.

grumpitron
I think the Fed are focused on stabilizing prices, not getting them to go down. Deflation is an entirely different beast than inflation and the Fed certainly does not want to deal with that.
AnimalMuppet
Layoffs are concerning. How big a pad would you have if you buy the house? Can you live without income for a few months? (You have the same problem with renting, except that you probably have a bigger pad in that case, since you haven't forked out the down payment.)

Are you in a town with a strong tech sector? If you lose your job, how hard is it going to be to find another one? (Harder if ten thousand other tech workers are looking at the same time...)

Me personally, if after the down payment I had a big enough pad to ride out several months if I got laid off, I'd probably go ahead and buy. But I am not a financial advisor, just some rando on the net...

willio58
My understanding is almost always yes if you can afford it and want to own a house. If the prices go down, you can refinance and pay less. If the prices go up, you’ve already bought the house so it’s just free money.

If you have a good emergency fund layoffs can be managed.

bearhall
if prices go down you can’t just refinance and pay less. refinancing requires paying out the old mortgage. so that doesn’t check out if prices are down.

if interest rates go down you can refinance.

it’s not a zero risk purchase. the price going down means you’ve lost value but your loan value stays the same.

willio58
Thanks for clarifying. Of course you can just wait for the market to pick up again (assuming you're not living in an area where prices will continue to fall for years) but that's some good info.
codegeek
Regardless of the market condition and even your own situation, do not buy a house if you don't plan to live in for at least 7-10 years. Anything less, your risk is much higher in general.
matt_s
Having bought and then moved a couple times before even 5 years in a house, definitely follow this advice. You might see a mortgage payment that is less or equal than your rent but that doesn't account for buying/repairing roof, HVAC, plumbing, lighting and other maintenance let alone utilities being higher. Then throw in that its your own space now so all those things you want to do to personalize like paint, furniture, fixture changes, etc.

I see people complain about renting all the time but in one scenario we rented in between houses and it was such a huge stress relief to just call maintenance and plop my ass on the couch.

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more_corn
I’d buy. Buying a house was the best financial move I ever made. If rates come down in two years you can refinance.