Should youbuy a homenow or should youwait? Thats a big question on many peoples minds today.And while what timing is right for you will depend on a lot of otherpersonal factors, heres something you may not have considered.
If youreable to buyat todays rates and prices, it may be better to focus on time in the market, rather than timing the market.
The Downside of Trying To Time the Market
Trying to time the market isnt a good strategy because things can change. Heres an example. For the better part of this year, projections have said mortgage rates will come down. And whileexperts agreethats still whats ahead, shifts in various market and economic factors have pushed back the timing of when thatll happen. Heres how thats impacted homebuyers whove been sitting on the sidelines. AsU.S. Newssays:
Those who put off buying a home during the past few years as they were holding out for lower mortgage rates have been left out of the market. . . mortgage rateshave stayed higher for longer thanpreviously expected, keeping monthly housing payments elevated. In other words,affordability didnt improve for those who chose to wait.
This is why timing the market may not pay off if youre ready and able tobuy now.
The Proof Is in the Pudding: How Homeowners Benefit from Rising Home Prices
Delaying your plans also means missing out on the equity youd gain if you went ahead with your purchase today. And the potentialequity gainsthat are at stake may surprise you.
Each quarter,Fannie Maereleases theHome Price Expectations Survey. It asks over one hundred economists, real estate experts, and investment and market strategists what they forecast for home prices over the next five years. In the latest release, experts are projectinghome priceswill continue to rise through at least 2028 (see the graph below):
To give these numbers context, lets take a look at a breakdown of what you stand to gain once you buy. The graph below uses a typical homes value to show how a home could appreciate over the next few years using those HPES projections:
In this example, lets say you went ahead and bought a $400,000 home at the beginning of this year. Based on the expert forecasts from the HPES, you could gain more than $83,000 in household wealth over the next five years. Thats not a small number.
This data helps paint the picture of why time in the market really matters.
The Advice You Need To Hear If Youre Ready and Able To Buy Now
Right now, you may be focused on whats happening withmortgage ratesand how those impact yourmonthly payment, but dont forget to factor inhome prices.
Prices are expected to continue climbing, just at a more moderate pace. And while a moderate rise in prices may not be fun for you now, once youown a home, that growth will be a huge perk. Thats the time in the market piece.
Sure, you could try timing the market, but the equity youll be missing out on in the meantime is something to seriously consider. If youre ready and able to buy now, you have to decide: is it really worth waiting?
Rather than focusing on timing the market. Its better to have time in the market.
AsU.S. News Real Estatesums up:
Theres never a one-size-fits-all answer to whether now is the right time to buy a home. . . . Theres also no way to predict precisely what the market will do in the near future . . .Perfectly timing the market shouldnt be the goal. This decision should be determined by your personal needs, financial means and the time you have to find the right home.
Bottom Line
If youre debating whether to buy now or wait, remember its time in the market, not timing the market. And if you want to get the ball rolling and set yourself up for those big equity gains, call me, Marie McLaughlin at 727-858-7569 to make it happen.
Source: https://www.keepingcurrentmatters.com/2024/06/26/focus-on-time-in-the-market-not-timing-the-market/
