If buying your first home is among your New Year's resolutions for 2018, you might be viewing the current real estate landscape with equal parts hopeful wonder and anxious dread.
As a first-time buyer, you can expect plenty of company at open houses and a lot of headwinds in your search. Experts predict 2018 will be another seller's market, with demand far outpacing the available inventory of homes for sale.
But that doesn't mean you have to sit on the sidelines. Here are some signs it could still be your year to buy a home.
This might be your year to buy if…
You expect to stay put for the foreseeable future
For homeownership to make sense financially, most experts say you should be prepared to live in the home for five years or more. A longer time frame is more forgiving of market fluctuations and gives you time to build enough equity to cover the considerable costs of selling a home later.
That's especially true now, when home prices have been climbing for years and we could be nearing a market top (though it's impossible to say). Time heals most wounds, and that includes buying overpriced real estate: Even people who purchased a home at the peak of the mid-2000s housing bubble and spent the last decade underwater on their mortgages are, in many places, finally back in the black — if they were able to wait it out.
If you've officially "settled down" — you like your job and it's on solid footing, and you're ready to stay in one spot for at least five but ideally 10 or more years — then buying a home can make sense, even in an inflated housing market.
Your city is still affordable (or you're geographically flexible)
Plenty of smaller, fun cities around the country are still relatively affordable to home buyers. Cities such as Madison, Wisconsin; Columbus, Ohio; Austin, Texas; or Grand Rapids, Michigan, combine affordability with growing job markets and lots of young people.
So if your area is still affordable — or if you're able and willing to relocate to a place that is — 2018 can absolutely be your year to buy a home.
You want to buy a new home in the suburbs
Single family housing starts — the official term used for new home construction projects getting underway — hit their highest levels since 2007 last month. With a lack of inventory pushing up prices, any new housing for sale can relieve some of that pressure.
And while new development in recent years has largely focused on the luxury market, Zillow chief economist Svenja Gudell expects developers to start building more starter homes this year — but in cheaper areas farther from urban centers.
So if you'd rather own a newly built home than an old one, and you don't mind living an hour's commute from the city, you might have more to choose from this year.
Your city is in the midst of a building boom
While a lot of that single family construction will happen outside urban centers, some big cities are also seeing a surge in new development.
The National Association of Realtors forecasts a flood of new inventory to hit the market in the second half of 2018, and perhaps sooner in places like Boston, Detroit, Kansas City, Nashville and Philadelphia. Meanwhile, Realtor.com expects more homes to change hands this year in fast-growing but relatively affordable areas like Las Vegas, Dallas, Salt Lake City, Nashville, Charlotte, and Colorado Springs.
You qualify for first-time homebuyer grants
Without an existing home to sell into the market, first-time buyers are at a distinct disadvantage. That's one reason cities and states try to make it a little easier on young home buyers by offering low-down-payment mortgages, or even down payment assistance and grants worth thousands of dollars toward the purchase price.
If your first-time buyer status and current income levels qualify you for free money or attractive financing from your state or city, it might be worth taking the plunge this year.
Another thing to consider: If you or your partner got a raise next year, would you still qualify for a first-time homebuyer program? If you're already bumping up against the income limits, you might do better to buy a home now, while you still qualify.
This may not be your year to buy if...
Each of these cases has a flip side, of course. If you're not ready to commit to five or more years in your home, you should probably wait to buy. If you're not willing to leave your expensive but walkable urban wonderland for a far-flung suburb or a cheaper city, I can't say I blame you — but you may have to wait as well.
Remember, too, that renting has distinct advantages — chief among them the mobility and freedom to welcome opportunity when it knocks on your apartment door. If you're enjoying your rental lifestyle — or not emotionally ready for the risk and responsibilities of homeownership — there's little reason to rush into a fiercely competitive real estate market.
And it should go without saying that if you're not on solid financial footing just yet — with a good credit score and at least some money saved up for a down payment and the ongoing costs of owning a home — you'd be better off spending this year getting your finances in shape. Buckle down on your budget and use whatever tax savings come your way to pay down debts and save up a down payment. With any luck, you'll be ready to buy a home this time next year.