Should You Buy a Home Now or Wait? Here's What You Should Consider
- yourrealestateangel
- Sep 27, 2024
- 3 min read
In today’s real estate market, you might find yourself asking, “Should I buy a home now or wait for better conditions?” It’s a common question, especially with so much uncertainty around interest rates, home prices, and inventory levels. While the answer will ultimately depend on your unique situation, there’s one crucial point that could help you decide: the sooner you buy, the sooner you start building equity. And with home prices projected to increase over the next several years, that equity can add up faster than you might expect.
What Is Equity, and Why Does It Matter?
When you purchase a home, you’re not just getting a place to live—you’re making an investment. The key advantage of owning over renting is that you start building equity right away. Equity is essentially the portion of your home that you truly own, the difference between what your home is worth and what you owe on your mortgage.
While rising home prices might make some buyers hesitate, they actually work in your favour once you own a home. Over time, as property values increase, your home’s value will likely appreciate, and that’s where your equity really starts to add up. The sooner you buy, the sooner you can start taking advantage of this growth, which can significantly boost your net worth.
Why Now Might Be the Right Time: Expert Predictions
Fannie Mae conducts a Home Price Expectations Survey each quarter, asking over 100 economists, real estate experts, and market strategists what they think will happen with home prices over the next five years. The latest projections suggest that home prices will continue to rise, albeit at a more moderate pace, through at least 2028.
While price increases will vary depending on the region, the takeaway is clear: home values are expected to go up year after year. And while that might seem discouraging if you're waiting for a market dip, remember this—once you own a home, those rising prices actually work in your favour by growing your equity.
What’s at Stake If You Wait?
Waiting to buy a home might seem like a safe bet, but it comes with its own risks—especially when it comes to building equity. Let’s break it down: if you bought a home valued at $450,000 at the start of this year, expert projections suggest that over the next five years, you could potentially gain more than $90,000 in equity. That’s wealth you’re missing out on if you decide to delay your purchase.
The potential equity gain is not just about how much your home could be worth in the future—it’s about setting a foundation for your financial security. As property values rise, your investment in your home grows.
Falling Mortgage Rates: A Window of Opportunity
Mortgage rates are one of the biggest factors affecting home affordability. Earlier this year, rates peaked at over 7%, making it more expensive for buyers to borrow. But as of mid-September, rates have dropped to around 6.12%, which could make buying more affordable if you act now.
Locking in a lower rate means you’ll save on interest payments over the life of your loan, and it can also help make your monthly mortgage payment more manageable. Combined with rising home prices, this decrease in rates could offer you an opportunity to buy before rates increase again or home prices climb even higher.
So, Should You Buy Now or Wait?
The decision comes down to your personal financial situation, lifestyle goals, and long-term plans. Are you financially ready to purchase a home? Does the idea of building equity appeal to you, or would you prefer to wait for possible market shifts? While it’s impossible to perfectly predict the future, the expert consensus is that home prices will continue to rise, which means the longer you wait, the more potential equity you may leave on the table.
Consult a Real Estate Expert
Deciding when to buy a home is a big decision, and getting the right advice can make all the difference. A real estate professional can help you understand what’s happening in your specific area and explain how current trends, like mortgage rates and inventory levels, impact your options. They’ll also be able to help you weigh the pros and cons of buying now versus waiting, giving you a clearer picture of what works best for your circumstances.
While there’s no one-size-fits-all answer, the numbers suggest that buying sooner rather than later could offer you significant advantages. Between the potential for equity growth and the recent dip in mortgage rates, today’s market presents a unique opportunity for those ready to buy.
If you’re unsure whether now is the right time for you, connect with us and let us help you evaluate your options. There's no pressure on you to make a decision, we will only provide you with the information and insights you need to make the best choice for your financial future.
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