Should you buy a home now or is it better to wait?  It’s a common dilemma for many people today.  The right answer depends on your personal situation, but here’s something to think about. If you can afford to buy at today’s interest rates and home prices, it might be better to put your focus on time in the market instead of trying to time the market.  

Why Timing the Market Is Risky

Timing the market may not be the best way to go because things can change unexpectedly. For a good part of this year, forecasts predicted that mortgage rates would drop, but that might take longer than you think. Even though experts still believe that will happen, changes in the market have delayed the timeline – so it may be a while. This has made an impact on homebuyers who’ve been waiting on the sidelines. Here’s what U.S News has to say:

“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 is why timing the market may not be worth it, if you’re able to buy now. 

Gaining Equity: How Rising Home Prices Reward Homeowners

Putting off your plans means you'll miss out on the equity you could start building if you were to buy today. You might be surprised by how much potential equity you're leaving on the table. Every quarter, Fannie Mae releases the Home Price Expectations Survey, which asks over a hundred economists, real estate experts, and market strategists about their home price predictions for the next five years. According to the latest survey, home prices are expected to keep rising through at least 2028 (see the graph below):

To put these numbers into perspective, let's examine what you could gain by purchasing a home now. The graph below shows how a typical home's value might appreciate over the next few years based on the HPES projections:

In this example, suppose you purchased a $400,000 home at the start of this year. According to the HPES expert forecasts, you could gain over $83,000 in household wealth within the next five years! That's a lot of money! So, as you can see, this data shows why time in the market really matters.

Ready to Buy Now?  Here’s Some Important Advice 

You might be focused on current mortgage rates and their impact on your monthly payment, but don't forget to consider home prices as well. While home prices are expected to keep rising, the increase will be more gradual. This steady price growth may seem challenging now, but once you own a home, it will work in your favor by boosting your equity over time.

You could try timing the market, but think about the equity you'll miss out on while waiting. If you're ready and able to buy now, you need to ask yourself:  is it really worth waiting?

Focus On Time In the Market Instead of Timing the Market

According to U.S. News Real Estate:

“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.”

In Summary

If you're trying to decide whether to buy now or to hold off, just remember this: it's not about timing the market, it’s about time in the market. If you’re ready to start building equity and take advantage of potential gains, let's connect and get the process started!