The question of whether to buy a home now or wait is on many people’s minds today. While the right timing depends on your personal circumstances, there's an important factor you might not have considered.
If you can afford to buy at current rates and prices, focusing on your time in the market could be more beneficial than trying to time the market.
The Pitfalls of Trying to Time the Market
Attempting to time the market is often unwise because market conditions can change unexpectedly. For instance, projections throughout this year have suggested that mortgage rates would decline. Although experts still anticipate this, various economic factors have delayed the expected drop in rates. U.S. News highlights the consequences for homebuyers who have been waiting:
“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 example illustrates why waiting to time the market may not be advantageous if you’re ready to buy now.
Homeowners Benefit from Rising Home Prices
Delaying your home purchase also means missing out on potential equity gains. The equity you could accumulate by buying now might surprise you.
Each quarter, Fannie Mae releases the Home Price Expectations Survey (HPES), which gathers forecasts from over a hundred economists, real estate experts, and market strategists. The latest survey projects that home prices will continue to rise through at least 2028.
Consider this example: If you bought a $400,000 home at the beginning of this year, the HPES projections suggest you could gain over $83,000 in household wealth over the next five years. This significant potential gain underscores why time in the market is crucial.
What You Need to Know if You’re Ready to Buy Now
If you’re focusing solely on current mortgage rates and their impact on your monthly payments, don’t overlook the importance of home prices. Prices are expected to continue rising, albeit at a more moderate pace. While this gradual increase might not seem ideal now, it will benefit you once you own a home. This is the essence of the time in the market principle.
Trying to time the market could mean missing out on significant equity gains. If you’re ready and able to buy now, consider whether waiting is truly worth it.
Expert Advice on Buying a Home
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.”
Bottom Line
If you’re debating whether to buy now or wait, remember that time in the market often trumps timing the market. To start building equity and secure your financial future, connect with an agent and take the first step toward homeownership.
Comentários