After months on the sidelines, many homebuyers who faced high mortgage rates and affordability challenges now have a golden opportunity to make their move. With rates trending downward, today’s market presents a unique sweet spot for buyers—one that may not last long.
If you have been considering a move, here are compelling reasons to reconsider waiting.
Assessing the Market
As you contemplate whether to buy now or wait, think about this: What do you anticipate others will do?
If mortgage rates continue to decline, as experts predict, more buyers are likely to re-enter the market. A recent survey from Bankrate indicates that over half of homeowners would be inclined to buy this year if rates fall below 6%. With current rates already in the low 6% range, we’re close to that threshold. The reality is, once rates dip into the 5% range, the number of active buyers will likely increase, leading to more competition.
Increased demand could drive home prices up, potentially offsetting any benefits from a lower interest rate. As Nadia Evangelou, Senior Economist at the National Association of Realtors (NAR), notes:
“The downside of increased demand is that it puts upward pressure on home prices as multiple buyers compete for a limited number of homes. In markets with ongoing housing shortages, this price increase can offset some of the affordability gains from lower mortgage rates.”
What This Means for You
Right now, you have the chance to get ahead of the curve. Today’s market is advantageous for buyers because many are still waiting, resulting in less competition for you. Affordability has already improved significantly. Recent declines in mortgage rates have made homeownership more accessible. According to Mike Simonsen, Founder of Altos Research: “Mortgage payments on the typical-price home are 7% lower than last year and are 13% lower than the peak in May 2024.”
While the supply of homes for sale remains low, it’s higher than it’s been in years. Ralph McLaughlin, Senior Economist at Realtor.com, reports: “The number of homes actively for sale continues to be elevated compared with last year, growing by 35.8%, a 10th straight month of growth, and now sits at the highest since May 2020.”
This means you have more options than ever before. With fewer buyers in the market, improved affordability, and a greater selection of homes, you can find the right one before competition heats up.
The Risks of Waiting
If you are holding out for the “perfect” time to buy, be aware that timing the market is incredibly challenging. The longer you wait, the greater the risk that conditions will change—and not in your favor. Greg McBride, Chief Financial Analyst at Bankrate, advises: “It’s one of those things where you should be careful what you wish for. A further drop in mortgage rates could bring a surge of demand that makes it tougher to actually buy a house.”
Bottom Line
Now is the time to act—don’t wait for increased competition and higher prices. You have a unique opportunity to buy a home in this advantageous market. Reach out to Scott and the Smolen Team today to discuss your options and take the next step!
