It is an enormous decision to buy your first home. This is even more true if the market is as hot in recent years.

This could be the worst housing market we have ever witnessed, according to financial advisers. They advise clients to wait.

Kahler Financial Group, a certified financial planner, was founded in Rapid City by Rick Kahler. The group is located in South Dakota.

Kahler who lives in Rapid City said, “I advised a client 18-months ago not to purchase a house.” I was wrong of course!

The pandemic has not only failed to cool down the housing market but it has accelerated it. Redfin real estate broker reported that the US average home sold for $377,000 at the end September. This is 14% more than the September 2018 average home price and an astonishing 30% less than the September 2019 average selling price of a house at $291,000.

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These are the reasons why they have been on the rise.

Redfin’s chief economist Daryl Fairweather stated that interest rates have fallen to historic levels, the demand is high for homes in the pandemic, and the supply of houses has not increased enough for buyers. He also noted that in the past decade, the U.S. saw its smallest number of new houses since the 1960s.

Fairweather said, “The market forces are still at work,”

Fairweather anticipates that interest rates would rise by 60 basis point next year. But, the National Average Annual Percentage Rate on FHA-approved Mortgages, which was 3.63% Oct. 13 according to Bankrate.com on October 13, is still a low rate. Because of the shortage of labor and materials in the construction sector, she doesn’t feel that it is capable of resolving the housing supply/demand problem anytime soon.

Fairweather stated that “I don’t believe housing prices will fall next year.” We are currently in a seller market. However, we remain far from being a buyer market.

The current homeowners have the seat of the catbirds. Current homeowners are in the catbird seat. They don’t have to pay too much for a home. Instead, they can get rid of their current one. However, this is a very different situation for those who are first homebuyers.

Sheryl Garrett, CFP said that this market could prove to be one of the most difficult for first-time buyers. Do not rush to buy a home.

Garrett, who is the founder and CEO of Garrett Planning Network, believes that people may be driven to purchase a home because they have a bad reason.

Garrett stated, “Our society believes that you can’t have your house.” Renting a house is not something to be ashamed of.

(Editor’s Note: Garrett has a Eureka Springs home.

However, rent costs have also been rising but not as much as housing prices. According to Redfin data and RentPath digital marketing website, the average national rent for all types of homes and apartments rose by 13.1% over the past two years.

Kahler recommends patience to first-time homebuyers, even though they underestimated the housing market 18 month ago.

His advice was to wait a year if you were considering buying a home. The last 18-months have seen prices rise by 20% to 30%.

He stated that renting may be an option right now.

Kahler, like Garrett sees people buy homes in an impulsive fashion without giving thought to the commitment involved.

He said, “Buying a house seems to be part of our DNA.” “People make decisions emotionally — and they can often be poor decisions.”

Kahler and Garrett recommend the following tips if you’re determined to purchase a home in this area:

• Don’t buy more property than you are able to afford. You must set boundaries and stay within them. Kahler explained that “I have seen people spend $400 to $500 per day to get what they want.”
• You should keep your monthly housing costs, which include insurance and taxes, at a reasonable percentage of your income. He stated, “I like 25 percent of my income as a cap.”
• You should not hire a fiduciary to represent you. “Real estate transactions can happen quickly,” said Kahler. You need to have someone you can reach out to when counteroffers arise.
• Garrett suggested that Garrett make certain you are happy to stay in the area and home for a prolonged period of time. She added that renters can simply pack up and move. If you have the house you can stay there for months, or even years.