Many people swear by home ownership; some call it a form of “forced savings,” while others see it as a way to build generational wealth. Buying a home has long been considered one of the best ways for middle class people to access social mobility. This was especially true before the creation of the first index fund in 1976. As people built equity in their homes and passed it on to their heirs, it enabled families to build generational wealth. .

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However, despite the various advantages of buying a home, that doesn’t mean it’s always a good decision. For example, the prices of existing houses has grown at a record rate by 17.2% in March 2020 compared to March 2019. With record prices, housing is less affordable than ever.

Related: 10 Reasons To Think Twice Before Investing In Real Estate

This gallery will cover the specific reasons why you shouldn’t be buying a home right now despite the buying craze.. Instead, waiting for the market to stabilize may be a better choice.

Last updated: May 24, 2021

1. You are in a hurry to buy

A lot of people seem to be in a rush to buy right now, but this could create a number of challenges. For example, you might make unnecessary compromises in terms of what you are looking for in a home. Again, all homes will likely have at least a few qualities that you could do without, but you may be able to find one in a more favorable location or one that has more of the features you want.

Additionally, many houses currently have bidding wars. If you make an offer, chances are it won’t be accepted and you end up getting frustrated. While it’s not uncommon for your offer to go unsuccessful, there are stories of people bidding on 15 or more homes and always coming in empty-handed.

Read: Common Real Estate Myths You Need To Know

2. You don’t have (a lot) of money on hand

As you may know, it is standard practice to put down a 20% down payment on the purchase of a home. It may be possible to buy with less, such as with an FHA loan that lets you put 3% down or a conventional loan with 5% down. But these may not work to your advantage, says Andrea Woroch, expert in consumption and money saving. “When you put less than 20% on the purchase of your home, 2 things happen: 1, you are forced to pay monthly fees for private mortgage insurance (PMI), which is just a waste total money) and 2, you may be stuck in a higher interest rate and your monthly payment is higher due to a larger interest payment.

The story continues

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3. You can’t afford the mortgage payments

Whether it is due to the unexpected arrival of your dream home on the market or simply the higher prices that we are seeing now, there are many reasons why you might be tempted to buy more home than you really want. can you afford it. But it might not be the right decision, says Chuck Meier, SVP, mortgage sales manager at Sunrise banks. “First, you need to make sure that a monthly mortgage payment won’t leave you strapped for cash. If you are going to be paying more than 30% of your monthly income on a mortgage, it may not be a good decision to buy. A mortgage you can’t afford will hurt you in the long run.

Find out: How much homes will be worth in your state by the end of 2021

4. Buying a house will make you “poor house”

If you’ve never heard of a “poor house” before, it means you’re spending so much on your mortgage and other household expenses that you have very little left at the end of the month. Therefore, it can be difficult to achieve other financial goals.

This can happen for a variety of reasons, such as living in an area where housing costs are higher than usual in today’s market. Another potential reason is ignoring the true cost of home ownership. Either way, you don’t want to delay your other goals as a result of buying a home.

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5. You don’t have great credit

For the few people who pay their house in cash, have a good credit rating is not a necessity. But for the rest of us, it’s important to build your credit in the years leading up to mortgage application. “It’s because lenders look at your credit score and your credit report to determine your creditworthiness and the likelihood of you paying off your mortgage,” Woroch said. “The higher your credit score, the easier it will be to qualify for the best loan terms and the lowest interest rate. “

Learn: What the housing market looks like so far in 2021 – and what that means for the rest of the year

6. You (already) have a lot of debt

The biggest debt most consumers will ever have is signing a mortgage. But if you already have significant debt, adding a mortgage to the mix could complicate matters further. This is especially true if you are struggling with your existing debt. “A mortgage is usually a 15 to 30 year commitment,” says Dan Demian, financial advice expert at Albert. “For many of us, it’s longer than anything we’ve committed to in the past. If you’ve had a hard time getting your car, credit card, or loan payments on time, you may want to reconsider a large commitment like a house until your debt levels are under control.

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7. You don’t have emergency funds

Have a emergency fund is extremely important for a number of reasons. If you don’t currently own a home and don’t have emergency (or insufficient) funds, it might not be a good time to buy. After all, there are unforeseen expenses that are expected when you own a home, and you will need to cover them. “After getting the keys to your dream house, you’ll often be surprised by the extra bills that suddenly require your attention,” Demian explains. “Whether it’s property taxes, HOA fees, lawn maintenance / upkeep, or house maintenance (like a new roof or a new furnace), having a cash reserve is essential. to afford and maintain a house.

Find Out: Here Are 21 Real Estate Terms You Need To Know Before Buying A Home

8. You can’t find a home that meets your needs

It might sound obvious, but it’s particularly appropriate right now. A house is unlikely to ever be perfect and adapt to each of your needs, but you might notice that the selection is particularly sparse depending on where you live (or seek to live). “There are always cycles and sometimes the answer can be to wait for the right house to hit the market at the right time,” says Jess Kennedy, co-founder and COO at Straight line. “That doesn’t mean you shouldn’t keep looking or bidding on homes. It’s important not to let the emotions of the home search process override any good decision making. “

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9. You already own a house

While there are certainly many reasons that existing owners decide to buy, such as a growing family, there are also reasons to consider staying put. For example, a caller on a recent episode of WYNC Studios’ “The Takeaway” bought a house in February 2020, only to sell it soon after. She sold it for $ 60,000 more than she paid. The problem? This same housing shortage has left her unable to find new housing that meets her needs.

Although she eventually found something, she had to bid on 17 houses before one was accepted, and she paid more for the second house than the higher price she paid for the first. If you already own a home and don’t have a new one, you might want to wait for the market to stabilize.

Read: A look at the direction of real estate interest rates in 2021

10. It just seems like the right thing to do.

Fleeing overcrowded cities for exurbs and even the country was all the rage. You might be thinking, “Maybe I should move too!” After all, if everyone else is doing it, you probably should too, right? In fact, while it might be the right decision for other people, it doesn’t mean it is necessarily for you. If you’ve been wanting to escape the city for a long time, it might make sense, but make sure it’s the right choice for you. After all, buying a home is a big, long-term decision. It should never be an impromptu decision.

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This article originally appeared on GOBankingRates.com: 10 Signs You Shouldn’t Buy A Home Now