At some point, you’ve likely heard someone mention. “Yesterday was the best time to buy a home, but the next best time is today.”

Home values are on the rise across the country. With mortgage rates remaining high and prices climbing, you might be waiting for a drop in prices or trying to find the ideal rate. However, the reality is that waiting for the perfect moment could actually end up costing you more in the long run.

Home Prices Continue to Rise – But at a More Typical Rate

The belief that prices will fall significantly is more of a dream than reality in most markets. Based on the Home Price Expectations Survey from Fannie Mae, analysts predict that home prices will continue to increase at least until 2029.

We're not experiencing the dramatic increases we saw in past years anymore. Experts expect a steady rise of about 3-4% annually on a national level. This more gradual pace is a positive development for potential buyers.

How This Affects You

While it might be tempting to hold off until prices or mortgage rates drop before making a purchase, there are a few important factors to think about if you choose to wait.

• Home prices are expected to rise tomorrow compared to today. The longer you wait, the more you’ll end up paying.

• Hanging on for that ideal mortgage rate or a drop in home prices might not be the best strategy. Even if rates go down a bit, the increase in home prices could end up costing you more in the long run.

• Buying now allows you to build equity faster. With home values on the rise, your investment begins to appreciate as soon as you make a purchase.

If you buy a $400,000 home today, projections suggest it could increase in value by over $83,000 in the next five years. That’s a substantial return on your investment, allowing you to benefit instead of sitting on the sidelines.

Why Aren’t Prices Falling? It Comes Down to Supply and Demand

There are currently more homes available for sale compared to the same time last year and even last month. However, there still aren’t enough on the market to meet the demand from buyers looking to purchase. This keeps prices climbing. As Redfin notes:

“Prices will rise at a pace similar to that of the second half of 2024 because we don’t expect there to be enough new inventory to meet demand.”
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— Redfin

While each market has its own unique characteristics, many regions are expected to experience steady price growth. Some areas might stabilize a bit, but a significant decline across the nation seems unlikely.

Bottom Line

Staying in the Market Outperforms Trying to Time It

If you're unsure about whether to buy now or hold off, keep this in mind: real estate tends to favor those who jump into the market rather than those who try to perfectly time their entry.

Absolutely, the current housing market can be tough, but there are plenty of strategies to navigate it. Think about checking out various neighborhoods, looking into smaller condos or townhomes, or discussing alternative financing options with your lender. You might also want to explore down payment assistance programs. The important thing is to make your move when it feels right for you, instead of waiting for a perfect situation that might not come.

Curious about the current prices in our local market? Whether you're thinking about buying right away or just checking out your options, having a strategy in place can really help you succeed.