Buy Now or Wait?

Over the years, as house prices and interest rates go up and down, a constant question from potential buyers is, “Should we buy now, or should we wait and see if interest rates/prices move more favorably in our direction?” My answer is always the same: buyers should be looking at their family’s economic situation rather than the macroeconomic factors of interest rates and house prices.

Homes are a unique investment.

Buying a home is not the same as buying a stock or making any other kind of investment. This isn’t to say that a home can’t make a great investment or that buyers shouldn’t be fiscally prudent when buying – only that a home is less liquid — it’s slower to buy and sell, and more expensive to buy and sell — than almost any other kind of investment. And of course, a home has an emotional value for most people. And there is the obvious issue of having to find another place to live if it is sold.

When should you buy a new home?

I always tell people that they should buy a house when the timing is right for them. Most people buy a home when a significant life-changing event is happening, such as moving to a new city for a new job, starting a family, or downsizing after children have moved out. Maybe the house they’ve always wanted finally goes on the market. Or they need more space to accommodate an elderly family member. These decisions are all based on a family’s current situation, rather than the larger macroeconomic factors such as interest rates and market trends.

Over time, market fluctuations will even out.

Here’s the bottom line: if a home is purchased to be lived in for the longer term (at least 3-5 years), fluctuations in value will not be an issue. Likewise, if interest rates are at a high point when you buy, your mortgage can always be refinanced to a lower rate in the future. For decades, homes have been an amazing investment for millions of people, and I expect that to continue to be true.

But, what about high interest rates?

It’s true: right now, we’re experiencing higher interest rates than we’ve seen in years, and there is some market uncertainty as to future home values. That said, you have to live your life. Every situation is different and you have to make the choices that are right for you, but I can say that if my family planned to be in a home for at least three to five years, I would feel very comfortable purchasing now.

If you have specific questions about purchasing a home, mortgage structures, or interest rates, please reach out. I’m happy to talk through real-world rates and options with you any time.