Should You Buy a Home Now or Wait? The question of whether to buy a home now or wait is on many people's minds today. While the right timing depends on various personal factors, here's something you may not have considered.
If you can buy at today's rates and prices, focusing on time in the market might be more beneficial than trying to time the market.
The Downside of Trying to Time the Market
Attempting to time the market isn't a reliable strategy because conditions can change unexpectedly. For much of this year, projections indicated that mortgage rates would decrease. While experts still believe rates will eventually drop, various market and economic factors have delayed this outcome. This has impacted homebuyers who decided to wait. As U.S. News explains:
“Those who put off buying a home during the past few years as they were holding out for lower mortgage rates have been left out of the market . . . mortgage rates have stayed higher for longer than previously expected, keeping monthly housing payments elevated. In other words, affordability didn’t improve for those who chose to wait.”
This highlights why trying to time the market may not be advantageous if you're ready and able to buy now.
The Proof Is in the Pudding: How Homeowners Benefit from Rising Home Prices
Delaying your plans also means missing out on the equity you could gain by purchasing now. The potential equity gains might surprise you.
Fannie Mae's quarterly Home Price Expectations Survey (HPES) asks over one hundred economists, real estate experts, and investment and market strategists for their home price forecasts over the next five years. According to the latest release, experts expect home prices to continue rising through at least 2028.
Let's break down what you stand to gain if you buy now. Consider purchasing a $400,000 home at the beginning of this year. Based on HPES projections, you could gain over $83,000 in household wealth in the next five years. That's a substantial amount.
This data underscores why time in the market matters.
The Advice You Need If You're Ready and Able to Buy Now
While you may be concerned about mortgage rates and their impact on your monthly payment, don't forget to consider home prices. Prices are expected to keep climbing, albeit at a more moderate pace. While a moderate rise in prices might not be ideal now, it becomes a significant advantage once you own a home. This is the essence of time in the market.
Sure, you could try timing the market, but consider the equity you might miss out on in the meantime. If you're ready and able to buy now, is waiting really worth it?
Rather than trying to time the market, it's better to spend time in the market.
As U.S. News Real Estate puts it:
“There’s never a one-size-fits-all answer to whether now is the right time to buy a home. . . . There’s also no way to predict precisely what the market will do in the near future . . . Perfectly timing the market shouldn’t be the goal. This decision should be determined by your personal needs, financial means, and the time you have to find the right home.”
If you're debating whether to buy now or wait, remember that time in the market is more important than timing the market. To start your journey towards significant equity gains, connect with our team today!