The Business Cycle and Buying a Home ~ Home Buying Advice

How to Time Your Home Purchase to the Market Cycle?

Bonnie Jessee, Realtor

530 412 3984

Ah, if only we had that special real estate crystal ball!  Then timing your purchase to the cycle would be an easy task!

Attempting to time your purchase to the “business” cycle is sometimes getting lucky and sometimes paying attention to the small signs.  Even economic advisors and consultants have inconsistencies accurately predicting the future economy. Even when these experts are relatively successful, the real estate market does not necessarily move in tandem with the economy as a whole.

Part of the reason is the timing and inconsistency of interest rates.

During periods of economic growth, interest rates are generally higher. Therefore fewer people can afford to purchase a home or second home unless they are cash purchases. When the economic situation is slower, interest rates fall, and more people can afford to purchase a home by obtaining a mortgage.

As you can see, this cycle does not move in conjunction with the remainder of the economy. It is also influenced by levels of employment, pay scales of various jobs, and consumer outlook for the future. Such facts make it difficult to know ~ ahead of the time ~ whether the housing market is going to be a wise investment.

The best advice is to preview the market where you intend to purchase, deal with a professional Realtor®, and plan on holding for as many years as possible. 

Unless, of course, you have a crystal ball!

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