Want to Buy a Home This Year? Barbara Corcoran Says Don't Wait

The real estate expert warns that hesitating could cost you.

As someone who's made a fortune in the world of real estate, Barbara Corcoran is unquestionably tapped into the housing market. And she's well aware that at this point, it hasn't cooled off very much.

In fact, it's easy to argue that it's extremely difficult to buy a home right now. Not only are home prices still way up across the country, but it's gotten more expensive to take out a mortgage over the past five months. And so buyers today face a double whammy of sky-high purchase prices and mortgage rates.

Still, if you're looking to buy a home this year, Corcoran insists that one of the worst mistakes you could make is hesitating. If you wait too long, you might find that your home purchase becomes even more expensive.

Don't delay

A few months back, Corcoran advised buyers to go out and make offers on a home before housing prices climbed even more. And that advice still applies. But Corcoran says it's also important to buy a home before mortgage rates climb even more.

The Federal Reserve is already in the process of moving forward with a series of planned rate hikes. And while it sets the federal funds rate, not mortgage rates, its actions could make borrowing more and more expensive as 2022 moves along. That's why serious buyers should do their best to find a home and apply for a mortgage now -- before borrowing rates climb.

Are you really ready to buy a home?

Hesitating on the home-buying front could have bad results, as per Corcoran. But it's also important to make sure you're in a good position to purchase a home. To see if that's the case, you'll want to be able to answer yes to all of these questions:

• Is my credit score in good shape? (If not, a mortgage could be very expensive for you.)
• Am I largely free of debt? (You don't want to add a mortgage payment into the mix if you already owe a lot of money.)
• Can I keep my total housing costs to 30% or less of my take-home pay? (Going beyond that threshold could mean falling behind on housing expenses or other bills.)
• Is my job steady? (The last thing you want to do is take on a mortgage only to wind up out of work a few months later.)

Many buyers avoided the housing market last year, thinking home prices would come down and inventory would pick up this year. So far, that doesn't seem to be happening. And so if you're tired of waiting to make the leap into homeownership, that's understandable. But before you dive in, make sure you're truly ready financially.

Buying a home is a big step, and you don't want to get in over your head. And so when Corcoran says don't wait to buy, she's talking to people who are in a solid position to become homeowners. If your financial picture is different, then waiting could still make a lot more sense.