New Jersey Real Estate Blog

The prices are right for today’s buyer, and many consumers—especially those who have never owned a home before—are facing a buying dilemma. Should they take advantage of the times and buy a home now, even if they can’t afford the type of home they ideally want, or continue counting pennies until they can purchase their dream house?

“The current market has been flooded with some of the most favorable mortgage interest rates in years,” says Patricia Bell, President of Gloria Nilson Realtors, Real Living. While it can take a long time to save for that perfect home, low rates make housing more affordable, which is why so many buyers are acting fast.

“Buying a starter home, as opposed to holding out and saving up for your dream house, is a smart idea,” Bell notes. If you purchase a starter home today, you can potentially begin to build equity that can lead to the purchase of a larger trade-up home in the future. Additionally, you might not need that dream home right now. If you’re newlyweds who plan on kids in the future, but don’t need that extra bedroom or huge backyard right now, then you will save money—through both a lower mortgage and easier upkeep—by starting with a smaller home and going bigger only when you need it.

“By the time you are ready for that dream house, your finances will probably be in better shape—perhaps you will have switched careers or gotten that big promotion—so making a larger home purchase will be feasible,” says Bell.

“Purchasing a starter home is a great learning experience,” continues Bell. You will learn a lot about what you want and need with your first home—was that formal living room or office necessary? While that huge backyard looked great, was the upkeep affordable? Are you really happy with the location?

“A starting home is a great jump-off point to learn what it takes to own a home, pay a mortgage, make important financial decisions and build equity,” explains Bell. Once you know how to handle owning property, a more expensive purchase will be less stressful. “Of course, if you start with a home that isn’t your perfect fit, when you finally move into your dream home, you will appreciate it more.”