Should you buy a home now or wait? That’s a big question for many people today. While the right timing for you depends on various personal factors, here’s something you may not have considered: If you’re able to buy at today’s rates and prices, it might be better to focus on time in the market, rather than trying to time the market.
The Downside of Trying to Time the Market
Trying to time the market isn’t a good strategy because things can change unexpectedly. For example, projections have suggested mortgage rates would come down this year. While experts agree that’s still likely, various market and economic factors have delayed this. As a result, homebuyers waiting for lower rates have stayed on the sidelines, missing out on opportunities. 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 illustrates why timing the market may not pay off 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’d gain if you bought now. The potential equity gains might surprise you. According to Fannie Mae’s Home Price Expectations Survey, experts project home prices will continue to rise through at least 2028.
To illustrate this, consider buying a $400,000 home at the beginning of this year. Based on expert forecasts, you could gain more than $83,000 in household wealth over the next five years. That’s a substantial amount of equity you could miss out on by waiting.
The Advice You Need to Hear If You’re Ready and Able to Buy Now
Currently, you may be focused on mortgage rates and their impact on your monthly payment. However, don’t forget to factor in home prices. Prices are expected to continue climbing, albeit at a more moderate pace. While a moderate rise in prices might seem challenging now, once you own a home, that growth will be a significant benefit.
Sure, you could try to time the market, but the equity you’ll miss out on in the meantime is worth considering. If you’re ready and able to buy now, you have to decide: is it really worth waiting?
Rather than focusing on timing the market, it’s better to have time in the market. As U.S. News Real Estate sums up:
“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 it’s time in the market, not timing the market, that counts. To get the ball rolling and set yourself up for significant equity gains, connect with the Kruse Home Team. We’re here to help you make the best decision for your future.
