There are several thoughts, second thoughts, and afterthoughts involved in deciding to purchase a house. One may be sure that he 'wants' to buy a house, but he may not be sure that he 'should' buy one. The most common reasoning given for delaying any purchase plans is that now is not the right time. Whether the right time will be now or ten years later, nobody can ever be completely sure.

The appropriate time for purchasing a house does not depend solely on one's salary or a particular property's price. In fact, this is decided by a combination of market and individual factors.

Market Factors

• Interest rates:

If an investment involves taking a loan, the ideal time for such an investment would be when the interest rate is low. Interest rates directly affect one's finances; a low-interest rate would not only mean low EMIs for the borrower but can also help increase his credit limit. Interest rates and home loan processes have been explained in greater detail here.

• Government schemes:

Any financial year, which sees the introduction and implementation of real estate-related government schemes, is said to be beneficial for home buyers. Government schemes have a direct impact on the future of real estate in India. In the present time, there are some benefits that home buyers, especially first-time home buyers, can enjoy under the Pradhan Mantri Awas Yojana (PMAY) and Affordable Housing schemes.

Sometimes, some government or private banks also offer certain waivers or special rates. While these may seem insignificant at the surface, they do end up affecting the total cost significantly in the long run.

• Nearby developments:

A property/project extracts value from the amenities that it has in proximity. This means if one has wanted to buy a house in a certain area but cannot decide the right time of doing so, he must look at developments in the area. Development of railway/metro stations, educational institutions, healthcare centres, market places etc. substantially increase the value of houses in the area. The appropriate time, then, would be either after the area has been fully developed or when some concrete plans have been made and are sure to be implemented.

• Housing inventories:

According to a market economy's thumb rule, less demand leads to a fall in prices. If a seller has a high quantity of some good unsold, he will eventually lower the price of that good to get more sales. The same fundamental works in real estate, too. If research and expert opinions show that developers have unsold inventory, then purchasing a house would be a good decision since developers will be willing to offer massive discounts.

Individual Factors

• Substantial savings:

The decision of purchasing a house is not simple; it is a result of thorough deliberation and contemplation. In all practicality, one should purchase a house only when he has savings equivalent to at least 20% of the property's value.

• Financial stability:

More often than not and especially for the lower and middle classes, purchasing a home translates into taking a home loan. Fulfillment of the loan and the conditions attached to it requires a lot of commitment and financial planning. The right time to make such a commitment is when one's disposable income is such that monthly EMIs of the loan constitute only 30-40% of the income.

• Credit score:

It is not easy to get a home loan. One needs to prove his credibility and eligibility. A good credit history and credit score are important conditions for getting a home loan. A borrower must ensure a score of above 700 at the time of applying for the loan. The relationship between home loans and credit score is explained in greater detail here.

• Potential future plans:

Purchasing a home is a long-term investment. One must take such a responsibility upon himself only when he has decided to settle down in the particular area chosen for a long period. For people employed in transferable jobs, such considerations become all the more important.