So far, 2024 is not shaping up to be the best year to buy a home. Not only are housing prices still high, but mortgage lenders aren’t exactly offering up discounted borrowing rates.
Still, you may be eager to buy a home this year. But if any of these signs apply to you, you may want to sit tight until 2025 — or even beyond.
1. There are rumors of layoffs at your company
The U.S. labor market is currently in pretty good shape. Despite that, U.S. employers announced more than 82,000 job cuts in January, according to Challenger, Gray & Christmas.
If you’re worried at all about losing your job, then it’s best to wait on buying a home. Not only might a lack of a job prevent you from getting a mortgage, but it could make it difficult to keep paying that mortgage.
Of course, if there are no indications of trouble at your place of work, and your recent year-end performance review was positive, then there’s not necessarily a reason to be concerned about layoffs. But if there are rumors circulating about downsizing at your company, or if your employer has canceled big projects and put a freeze on business travel, it’s a sign that things may not be so rosy. In that case, you may want to put home-buying plans on hold.
2. You’re already juggling lots of debt
Perhaps you have a steady job you’re not at all worried about. But if you’re already juggling a number of loans and credit card balances, then you may not want to add to that debt by taking on a mortgage.
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Remember, too, that one factor mortgage lenders look at when assessing loan candidates is the amount of debt they have relative to their income. If that percentage is high, you might struggle to get approved for a home loan, even if you’re making all of your debt payments when you’re supposed to.
3. Your credit score needs a lot of work
When calculating a credit score, the two factors that carry the most weight are your payment history and your credit utilization, the latter of which represents the amount of revolving credit you’re using relative to your total spending limit.
If your credit score is poor, it’s probably because you either fell delinquent on payments or racked up too much debt relative to your credit limit. In either situation, it’s best to get to a better place financially — one where you can pay your bills on time and rely less heavily on credit — before buying a home.
Also, having poor credit could be a deterrent from getting a mortgage. The minimum credit score for a conventional mortgage is generally a 620, so if yours is lower, you might have to wait on buying a home so you can work on bringing that number up.
You may be hoping to buy a home sooner rather than later. But if these signs apply to you, it means 2024 may not be the best time.
The good news, though, is that now’s not really a great time to be buying a home anyway. So if you decide to wait, remind yourself that buying today would likely mean paying up for a home and signing an expensive mortgage. Sitting tight for a while could make it so you’re buying when market and borrowing conditions are more favorable.