For 55+ homebuyers, the constant changes in the housing market may cause some hesitation before you sign that dotted line. But despite some of the unsavory changes that may be concerning, it’s still an excellent time to transition to a 55+ community if that’s what you want to do.
Keep an Eye on Home Prices
Some areas are seeing more spikes in home prices than others. Before you move forward with your purchase, make sure you are considering the cost of the home today and how it compares to a few months or even the last sale. The prices may be higher than you anticipate, but you want to ensure that the cost averages out to similar homes in the area.
Many of these areas with higher prices compared to several years ago are stabilizing, so if you expect the market to return to those earlier prices, you may be waiting a while. The good news is that these higher prices mean you’re looking at higher equity. Even in your retirement years, it’s essential to establish outstanding equity in your home.
Your home equity can help you cover debt that you may accumulate unexpectedly, cover outstanding medical costs, or fund home repairs in the future. This is also a significant inheritance to leave behind for your loved ones to enjoy your memory.
Lock In On Interest Rates
Interest rates are higher than a couple of years ago. Some homebuyers see this and think they will wait out the interest rates. But, the 2023 trend is that interest rates are staying around 7%. The chance of this rate growing rapidly is low, so it may continue to rise over the year gradually, but it will take months to get to another complete percentage.
If you want to go ahead and make a home purchase, you should start looking before the rates rise even more by the end of the calendar year. The good news—refinancing rates are still low, so even if you get a rate now that isn’t the very best, you can refinance later for a more attractive rate.
Change What You Are Looking For
Should the home you’re looking at be out of your budget, don’t feel discouraged; try changing what you’re searching for. Consider the smaller homes offered in 55+ communities—they’re more affordable and offer access to the amenities offered in the community.
Smaller homes, like ranch styles or even bungalows in the coastal communities, are all the rage. They come with the following benefits that make them ideal for retired homebuyers.
Low Maintenance
Having a smaller home means that there’s less space to clean. You won’t have as many daily responsibilities, giving you more time to do the things you love.
Open Floor Plan
An open floor plan allows you to make the space your own to fit your needs and keep you comfortable. It also gives the illusion that your home is larger, so you don’t feel cramped in a smaller space.
Outdoor Seating
One of the benefits of a bungalow-style home is porch access and having lots of seating. Many of these homes also have back decks—or a space where you can easily add one—so you can always enjoy the outdoors.
No Stairs
As you reach your retirement years, the fewer stairs you have can lower the likelihood of a fall or accident. And you can always make up for the reduced exercise by walking in your community and interacting with your neighbors.
Embrace Tax Breaks
Once you start collecting Social Security, you can expect a significant tax break on your federal taxes yearly. This can help retirees better cover the overall cost of a home. Also, some states offer a homestead exemption if you meet age and disability requirements in 55+ communities. For example, South Carolina has exemptions for income and property taxes at the state level.
What Does Your Credit Report Look Like?
Before buying a home, you need quality credit that will allow you to get the lowest rates on the market. Right now, the lingering 7% is offered to those with good or excellent credit. You need a credit score of at least 670 to be eligible.
The best way to improve your credit score is to lower your debt-to-income ratio. Any loans that you have outstanding right now will also be counted in your DTI. If you have lingering debt, it may be a good idea to pay it off over the next few months. This will give you the best credit score available when the mortgage company runs your credit report.
Take Advantage of Our Resources Today
If you’re looking for homebuying assistance from a team of experts, contact us at 55places.com today for more information.
