You've made it. You are settled in life. You are on the path for financial security. Homeownership means more than just a picket fence or a two-car garage. It's emotional and personal. Even with the clouds that hung over the housing market the last few years, it was hard to get away from this idea -- that buying a place is part of the American Dream. It's certainly a part of the economic recovery. We still pay close attention to home sales, prices, inventory.
The National Association of Realtors says existing home sales topped an almost four-year high in July. So what do you need to ask yourself before you enter the market? We're getting some advice from Alison Rogers, a real estate agent and a columnist for Time.com.
What is the right moment to get in?
"Sometimes people have a desire to own a house. You have to remember that purchase of your single-family home isn't an investment, it's a consumption. I would certainly recommend that people have saved up a 10 percent down payment and feel that they're going to stay in the house for at least five years," says Rogers.
Rogers says first-time home buyers are always surprised to find out how expensive it is to own a piece of property.
"When you're considering purchasing, ask the current homeowner for his or her utility bills, his or her property tax bills, and also factor in the idea that you'll probably be making one major repair a year. I would just add in maybe 2-3 percent of the house's purchase price in my head as annual maintenance," says Rogers. "For maintenance, for example, if you're buying a $400,000 house, I would think of wanting to have $8,000 in annual maintenance costs. That sounds like a lot, but if you're replacing a roof or have boiler problems, it starts to add up."
Nowadays, people are looking at mortgage rates, which have been low for the past few years, but are now starting to creep up. Rogers says the rates are still historically very low.
"We've seen a bounce from 3.5 percent to 4.5 percent, which is very scary if you're thinking of buying. But historically anything below 6 percent is still a very low mortgage rate. I wouldn't use the rising rates as a reason to be too hasty in my decision [to buy]," says Rogers. "I wouldn't panic and I wouldn't make a decision you're going to regret based on just seeing those numbers move around."
Rogers says people shouldn't think of a home as a way of building wealth. She says building wealth is a wonderful extra of buying a home and is a worthy purchase you should save up to make, but you shouldn't expect price appreciation.
"The price appreciation that we got in this country in the '90s and the '00s really was whipped cream on top of the sundae. It wasn't something you should have expected and you shouldn't necessarily expect it to repeat," says Rogers.