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7 Signs It Might Be Time to Buy a New House

Aug 10, 2018 5 min read Scott Steinberg

Key Takeaways

  • If upsizing or downsizing holds strong appeal, consider making a move.
  • Longer commutes and growing maintenance expenses can be signs it's time to go.
  • Don't forget to account for hidden expenses and stockpile six months of savings before relocating.

Determining when to buy your first home is never a simple decision. Luckily, knowing when it's time to move to a second one can be far easier when you apply a few simple rules of thumb. Of course, with housing prices in virtually all major U.S. cities having risen in the past decade, according to Unison's Home Affordability Report, it also pays to know your financial bottom line.

Considering making a move? Following are several hints, tips, and suggestions that can help you know when to stay, when to go, and how (unlike a third of American home buyers) you can avoid blowing your budget in the process.


1. You've run out of room.

Starter homes often provide adequate space for singles or couples, but a growing family may find itself in tight quarters and tripping over toys. If you've got more kids than rooms, frequent visitors, or relatives looking to reside on-premises, it's probably time to make a move. Happily, with new homes today averaging 2,687 square feet (nearly 1,000 square feet larger than in 1973) and the average amount of living space per person having doubled in the last half-century, there's plenty of room to grow.


2. You'd prefer to downsize.

On the flip side, perhaps you need less space as your children grow and move out, or you've determined that a larger home can be a challenge to maintain. You certainly wouldn't be alone. A recent survey by real estate site Trulia notes that with home prices and maintenance costs increasing, more homeowners say they'd rather have a smaller home on the second run. If maintaining a large mortgage and upkeep on a more sizable property isn't preferred, or you're looking to stretch retirement funds further, a change of venue (perhaps even to a more moderately priced city) may be  in order.


3. Your commute is getting longer.

As your career expands, scoring a promotion or new job may mean more time on the road — time that translates to added expense and fewer moments to unwind with friends and loved ones. With most of us traveling 25.4 minutes to get to work, per the U.S. Census Bureau, a growing commute can also be a sign that it's time to reduce transit times, wear and tear on your vehicle, and personal strain. With gas prices rising by double digits and making a significant dent in paychecks, it's important to know precisely how much your time is worth. If the amount you're spending on transportation (both in terms of effort and financial expenditures) doesn't add up, relocating to a more conveniently located home is advisable.


4. Expenses are adding up.

Experts recommend setting aside 1-3% of your home's purchase price every year in a savings account for home maintenance and repairs — e.g., at least $2,000-$4,000 on a $200,000-$400,000 home. If you're regularly exceeding these costs, and/or dealing with household hiccups such as leaky faucets, faulty appliances, and cold drafts, it's time to reconsider where you reside. Purchasing a newer or more well-maintained home may come with added expenses up-front but may save you big on the back end.


5. You're a more attractive borrower.

There's more to buying a new home and relocating than making a 20% down payment. In fact, real estate website Zillow estimates that you'll pay upwards of $9,000 in hidden costs and maintenance — and that's before factoring in closing costs, moving expenses, furnishings, cleaning, and other expenditures. But if you can sock away six months' worth of emergency funds and find a new home (and new mortgage) that slashes your cost by 20-30%, it's time to consider relocating. Just be sure to factor in all expenses when putting together a budget — including those such as repairs, cleaning, and staging associated with getting your current home ready for sale.


6. Priorities or incomes are shifting.

Perhaps you're considering having more children or contemplating retirement. Maybe you're facing the prospect of caring for an aging in-law or parent. Alternately, more travel might be in your future, or more time spent on the road for work. In all cases, large homes often come with large commitments of time and finances, as well as significant upkeep (i.e., lawn care, painting, snow removal, etc.). Noting that what works for you today may not work for you tomorrow, shifting priorities and circumstances often indicate the need for a change of residence and situation as our lives and careers evolve.


7. The lending environment is in flux.

First-time home buyers account for nearly half of all new home loans, says Freddie Mac, with numerous grants and programs available to help some potential shoppers. But interest rates can change and become more favorable over time, just as household incomes and credit scores can improve, sometimes leading to better deals the second time around. Asking yourself a few questions can help you know if it might be time to refinance or reconsider switching loans or providers — not to mention moving into a more comfortable home. Seeing potential opportunities to save, or concerned that interest rates may rise soon? You may be able to get more home for the money or put hundreds back in your pocket, by moving to a new home.


Clearly, the prospect of buying a new home is an important decision and one that shouldn't be undertaken lightly. But relocating into a second house — especially one that better fits your changing lifestyle and needs — can also be one of the happiest moments of your family's life. The suggestions above may help you when considering if it's time to make the move and put up stakes in greener pastures.


What you can do next

Make a list of your priorities as a family going forward, plus features and amenities you'd like to see in a second home. Then build a budget (taking into account hidden expenses and maintenance fees) to determine how much home you can afford.


Hailed by Fortune magazine as The Master of Innovation, professional speaker Scott Steinberg is the author of 14 bestselling books on personal finance, leadership, and innovation.


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