I'm seeking some advice as to what do right now with regard to first time homebuyers in this environment. My wife and I (young thirties) have a new daughter that will soon be crawling, our current housing situation is growing cramped. So we want a house...
We have the ability to put 20% down, with a mortgaged amount within 3x gross income of 1 parent. 2nd parent doesn't want to work full time while kid is young, though part time is possible. This would likely only bring in ~20k/year after taxes and daycare. The houses we are interested are 5-6x income of the second parent. We have 6+ months of an efund.
We have some concerns about buying right now though. In our location, houses have appreciated ~20% during the last 1-2 years, which is an entire downpayment of appreciation...we are worried about losing that just as rapidly too. Also market offers are forgoing inspection contingency & often appraisal up to a certain amount. Since we are first time homebuyers, forgoing an inspection contingency seems foolish. We've already had 4 offers at above asking not be selected and are becoming a bit downtrodden over the whole housing situation.
The options as I see them:
- Wait for 1-2 years and incurring a guaranteed cost of $20-40k/year to rent
- Make market offers for homes, which probably risks about $50k in potential market value fluctuation and ~$50-100k of buying a house with an issue that an inspection would normally catch.