Per most of the advice in this forum my wife and I put off buying a house last year as we were planning a family but not sure when. We rent pretty cheap(825) a month for a 2 bed house(it's a tiny house though!). We probably live in about 800 square feet. That being said, we can do it for now. I think it would be hard when we have a baby. We are talking about trying this spring and then who knows.
I know I should resist market timing and all of that but ....I can't help but be pretty scared of interest rates. I had always thought in my head that simply if interest rates go up, real estate markets would correspondingly go down and it would be a wash. At least so far, in my local market, that doesn't seem to be the case yet. Seems like more people are rushing to buy.
Should I be worried about this and rushing to buy if that's are plan soon? Should I be switching back to saving up cash so we can get a bigger down payment? The current amount we have would not be 20% for a property here. Most ones that we are attracted to in the areas we want to live in...around $300k at least so we would do better to have another $20k at least in cash to cover all costs and maybe $30k to ensure an emergency fund is in place.
We have kept about $50k on the sidelines in cash while pouring all/most of our other income to get to a 50% to 60% savings rate. Right now we max out Tiras, 457, TSP, and another fixed state retirement plan wife has.
A brief summary of our cash flow and net worth:
$120,000 salary for both husband/wife
Current amounts going to retirement per year $11000 to TIRA's, $18,500 to TSP, $18,500 to 457, 800 to pension, $3200 to another state retirement plan that works like a 401k)
Take home pay after retirement savings and FSA: 120,000 - 57200 = 62,800
I should say after this, since we are front loading, saving much more on the side has been difficult. We may be able to do another $10k in taxable investments(or cash savings) towards end of year after wife maxes out.
0 debt
$50,000 cash
$210,000 retirement investments noted above(about $6000 is actually Roth)
2 used cars--no loans
FSA's...about 5000 year. I have a fair amount of medical expenses due to chronic health issue. (Note this is an FSA not HSA so it is use-or-lose)
Tax rate: Almost nothing with current retirement savings. I think last time I checked we were under 10% after all the deferred retirement
Credit scores: Decent 730-760 range
Total NW with cars: $276,000