You’ve likely heard the phrase, “The best time to buy a home was yesterday, but the next best time is today.” This saying holds true, as home values continue their upward trend. While mortgage rates remain elevated and prices keep climbing, waiting for a significant drop may not be the best strategy. In fact, delaying your purchase could mean paying even more down the road.

Home Prices Continue Their Steady Rise

If you’re hoping for a major price drop, the data suggests otherwise. According to the Home Price Expectations Survey from Fannie Mae industry experts predict that home prices will keep increasing through at least 2029.

The rapid price surges seen in previous years may have slowed, but a steady and sustainable growth rate of 3-4% per year is expected nationwide. This shift toward a more stable market is great news for buyers, as it provides a clearer picture of long-term home value appreciation.

What This Means for Buyers

While it might seem like holding off for lower mortgage rates or a price dip is a wise move, here’s what you need to consider:

• Home prices are projected to keep rising. The longer you wait, the higher the purchase price will be.

• Even if mortgage rates drop, rising prices could offset any savings. A slight decrease in rates may not be enough to counteract increasing home values.

• Buying now means building equity sooner. As home values appreciate, your investment starts growing immediately.

For example, if you purchase a $400,000 home today, price forecasts suggest it could increase in value by more than $83,000 over the next five years. That’s a substantial gain that could be lost by waiting (see graph below):

Why Home Prices Aren’t Dropping

The primary reason prices remain high is simple: supply and demand. While there are more homes on the market than last year or even last month, inventory is still too low to meet buyer demand. This keeps upward pressure on prices. Redfin explains it best:

”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.”

While local markets may vary, most will continue to experience steady price growth rather than a sharp decline.

Bottom Line: Time in the Market Beats Timing the Market

If you’re on the fence about buying, remember that real estate rewards those who get in the market, not those who try to perfectly time it.

Yes, today’s market has challenges, but there are ways to make it work—whether that’s exploring different neighborhoods, considering condos or townhomes, discussing alternative financing with your lender, or utilizing down payment assistance programs. The key is making a move when it makes sense for you rather than waiting for an ideal scenario that may never arrive.

Thinking about buying a home or curious about local market trends? Whether you’re ready to take the next step or just exploring your options, reach out to Mike Panza and the team at Panza Home Group for expert insights and guidance. Contact them today to start planning your next move.