Why Now Might Be the Right Time to Buy a Home
After months of sitting on the sidelines, many prospective homebuyers who were priced out by high mortgage rates and affordability challenges now have an opportunity to make their move. With mortgage rates trending downward, today’s market is a sweet spot for buyers—an opportunity that might not last long.
If you’ve been holding off on purchasing a home, here’s why you may want to reconsider and act sooner rather than later.
Should You Buy Now or Wait?
As you weigh your options and decide whether to buy now or wait, ask yourself this: What do you think everyone else will do?
The truth is, if mortgage rates continue to decrease as experts predict, more buyers will re-enter the market. A study from Bankrate reveals that over half of homeowners would be motivated to buy this year if rates drop below 6%.
With rates currently hovering in the low 6% range, we’re not far from that threshold. When rates dip into the 5% range, buyer demand is likely to surge—and that means more competition for you.
This increased demand could drive home prices up, potentially offsetting the benefits of slightly lower interest rates. Nadia Evangelou, Senior Economist and Director of Real Estate Research at the National Association of Realtors (NAR), explains:
“The downside of increased demand is that it puts higher 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.”
So, while waiting to buy may seem like a smart move, it could backfire if rising home prices outpace your savings from slightly lower rates.
What This Means for You
Today’s market offers you a unique opportunity to get ahead. Why? Because many buyers are still waiting on the sidelines, which means there’s less competition for you right now.
At the same time, affordability has improved significantly. Recent easing in mortgage rates has made homeownership more accessible. As Mike Simonsen, Founder of Altos Research, notes:
“Mortgage payments on the median-priced home are 7% lower than last year and are 13% lower than the peak in May 2024.”
Additionally, while the supply of homes for sale is still limited, it’s higher than it has been in recent years. Ralph McLaughlin, Senior Economist at Realtor.com, says:
“The number of homes actively for sale remains elevated compared to last year, growing by 35.8%, marking the 10th straight month of growth and now sitting at the highest level since May 2020.”
This means you now have more options to choose from than you’ve had in quite some time.
With fewer buyers in the market, improving affordability, and more homes to pick from, you have an excellent opportunity to find the right home before competition heats up.
The Cost of Waiting
If you’re waiting for the “perfect” time to buy, it’s important to understand that timing the market is nearly impossible. The longer you wait, the greater the risk that market conditions will shift—and not necessarily in your favor. As Greg McBride, Chief Financial Analyst at Bankrate, warns:
“It’s one of those things where you should be careful what you wish for. Another drop in mortgage rates could bring a surge of demand that makes it harder to actually buy a home.”
Bottom Line
Don’t wait until you’re dealing with more competition and higher prices. Right now, you have an opportunity to buy a home in today’s sweet spot—fewer buyers, improved affordability, and more homes on the market.
Act now, and get ahead of the crowd before the market shifts.