Should I Buy a House Now or Wait?

 

If you’re wondering, “Should I buy a house now or wait?” the answer depends a lot on why you are thinking about waiting in the first place.

Sometimes waiting makes sense. Sometimes it doesn’t.

The important part is knowing why you’re waiting and what needs to change before you move forward.

Most buyers I talk with are worried about one of two things: home prices or mortgage rates. They don’t want to buy now and find out six months later that prices dropped or rates came down.

Lately, there is another concern too. The economy, politics, and world events feel unsettled, and some buyers are hesitant to make a large financial commitment until they have a better idea of how things are going to shake out.

All of those concerns are understandable.

But before putting your plans on hold, ask yourself:

What exactly am I waiting for?

What Are You Really Waiting For?

There is a big difference between saying:

“I’m waiting because this payment is more than I’m comfortable spending.”

and:

“I’m waiting because I think mortgage rates will come down.”

One is something we can evaluate.

The other requires a prediction.

The same applies to home prices.

Maybe the homes you want really are outside your comfortable budget right now. Or maybe you are hoping prices will come down enough to get a better deal later.

You might need more savings. You may want to pay down debt. Your job or income may feel uncertain.

Each of those is a different situation, which means each one needs a different plan.

That is why the first step is not deciding whether to buy or wait.

It is figuring out what waiting is supposed to change.

Should You Wait for Mortgage Rates or Home Prices to Drop?

Mortgage rates move up and down, and home prices can rise, flatten, or soften depending on what is happening in the market.

Trying to wait for the perfect combination of lower rates and lower prices means trying to predict two moving targets.

Buyers who remember mortgage rates around 3% may also feel like today’s rates are unusually high. But Freddie Mac’s historical mortgage-rate data shows that the extremely low rates we saw during the pandemic were unusual. They are not a good baseline for deciding what mortgage rates should always look like.

Home prices can be just as tricky.

There may be individual homes that sell for less later. Some areas or price ranges may soften more than others. But that does not mean the type of house you want, in the area where you want to live, will become cheaper if you wait.

We can see this in the Savannah-area market too. There have been periods when inventory increased and homes took longer to sell, giving buyers more choices and sometimes more negotiating room, while median sales prices were still higher than the year before.

So when someone tells me, “I’m waiting for the market to get better,” my next question is:

Better in what way?

Lower prices? Lower rates? More inventory? Less competition?

Those things do not always happen at the same time.

If the Numbers Don’t Work, Fix the Numbers First

If today’s payment is more than you are comfortable spending, that is different.

That does not automatically mean buying is off the table. It may mean we need to adjust the strategy.

When I work with buyers, I like to start with the all-in monthly payment they are actually comfortable living with.

Their lender will still determine what they are approved to borrow, and that gives us the overall price range we can work within. From there, we look more closely at what different homes would actually cost each month.

That is where the strategy becomes more specific.

We may compare homes at different price points, look at another area where the same budget buys more house, or see whether seller concessions, a rate buydown, a larger down payment, or another loan option could bring the payment closer to where the buyer wants it.

Sometimes it is one adjustment.

Sometimes it is a combination of several things.

And I do not automatically rule out every home near the top of a buyer’s approved range. Depending on the property and the seller’s situation, there may be room to negotiate terms that make the monthly payment work better.

The goal is not simply to find out what a buyer can qualify for.

It is to find a way, when possible, for the house they want and the payment they are comfortable with to meet somewhere in the middle.

If we explore the reasonable options and the numbers still do not work comfortably, waiting may be exactly the right decision.

When Waiting to Buy a House Makes Sense

Waiting works best when there is a specific reason behind it.

Maybe you need to save a certain amount of money.

Perhaps paying down debt could improve your financing options.

It could be that additional savings could reduce or eliminate private mortgage insurance, depending on the loan you are using.

Possibly, your income or job situation feels uncertain right now, and you would be more comfortable making a purchase once that has changed.

Those are real reasons to wait because you know what you are working toward.

There is also a difference between postponing a purchase and simply having a long home search.

I have worked with buyers who wanted something that rarely came on the market. We set up a very specific search, stayed ready, and waited for the right property to be listed. They were not putting their plans on hold. Their search just took longer.

The concern I have is when someone says:

“I’ll wait until rates come down.”

“I think, I’ll wait until prices drop.”

“I am going to wait until the economy settles down.”

Those things may happen. But no one can tell you exactly when.

And while you are waiting, the numbers can keep changing too.

Depending on inflation, home-price appreciation, borrowing costs, and how quickly you are able to save, you could be moving closer to your goal or farther away from it.

That is why a waiting plan should have something you can actually measure.

Instead of:

“I’ll buy when things get better.”

Try:

“I’m going to save another $10,000, pay down this debt, and then have my lender run the numbers again.”

Now you have a plan.

So, Should I Buy a House Now or Wait?

There is no single answer that works for everyone.

If the numbers work comfortably for you and you find the right property, waiting only because you are hoping someone can predict the next move in rates or home prices may not improve your situation.

If the numbers do not work, figure out what needs to change.

Ask yourself:

What am I waiting for?

Is there something I need to be doing while I wait?

Before I’m comfortable moving forward, what needs to happen?

If you have clear answers to those questions, waiting may be part of a very good homebuying plan.

If you don’t, it may be worth taking another look at whether waiting is actually helping you get where you want to go.

Wait with a purpose, not a prediction.

 

— Sharie McCormack

Service you deserve. People you trust.

 

 

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