The real estate market is a fascinatingly changeable landscape. A real estate market characterized by fluctuating interest rates and prices of homes, as well as a general trend of uncertainty, leaves many buyers begging themselves one question: “Is now the time for me to buy, or should I wait until conditions get better?” The following are some insights from some experts in real estate that were collected to give a comprehensive view into what is happening in the existing market.
The Current State of the Real Estate Market
With any decision, it is important to understand where it currently stands. As of late 2024, the state of the real estate market is defined by a few key components: mortgage rates, housing inventory, and inflation. Here’s a breakdown of those elements:
Mortgage Rates
Mortgage rates are way up-from a year ago-in large part, a result of the Federal Reserve’s efforts to fight inflation. The average 30-year fixed mortgage rate has been hovering around 7%, up from recently record-low interest rates that many buyers enjoyed only a few years ago.
Rates, although unlikely to drastically fall anytime soon, are likely to stabilize by 2025, thereby affording more latitude for buyers. The experts note that many prospective buyers are in a holding pattern, waiting for the rate to come down, but that could be an opportunity window opening up for those who can pull the trigger now.
Housing Inventory
In many markets, the supply of homes for sale hasn’t improved much. And this inventory shortage has contributed to higher prices, particularly in some hot markets or desirable areas. Conversely, many other cities are experiencing the cooling effect, with prices moderating or even falling as the dampening impact of higher mortgage rates gradually sets in.
However, low inventory can work both ways. While it limits the available options for buyers, it also means there is less competition from sellers. For those looking in highly competitive markets, this may create an advantage for negotiating prices.
Inflation and Economic Uncertainty
The real estate market has been impacted by the greater economic climate, including inflation. Fears of a recession, or further economic instability, make many buyers leery of making large financial commitments. Inflation being what it is, monetary policies by the Federal Reserve will continue to affect mortgage rates.
While the economy is showing signs of recovery, it’s important for buyers to assess their personal financial situation. Experts recommend conducting a thorough budget review and considering how your income and savings will be affected in the long run before making a significant investment.
Expert Opinions on Whether to Buy Now or Wait
Whether to buy real estate now or wait for better conditions is a decision that depends on various factors, and experts are divided on the issue. Let’s hear what some top real estate professionals have to say.
1. “If You Can Afford It, Buy Now” — Tom Ferry, Real Estate Coach and Expert
Tom Ferry, one of the most well-known real estate coaches, thinks the current market is a buyer’s opportunity if they are financially set. He says that if you can afford the higher mortgage payments, now might be the time to buy. “Yes, rates are high, but if you plan to live in your home for the long term, the short-term pain could be worth it,” he says.
Ferry says that by buying now and locking in a property at today’s price, you can refinance in the future when rates may be lower. And with inventory still tight in many markets, waiting too long could mean losing out on the property you want.
2. “Wait if You’re Not Ready Financially” — Barbara Corcoran, Real Estate Mogul
Barbara Corcoran, a real estate mogul and Shark Tank investor, suggests that prospective buyers should be cautious if they are unsure about their financial situation. “Real estate is a big commitment,” she says. “You want to be absolutely sure you’re financially prepared before making that move.”
Corcoran emphasizes that buyers should not only consider their ability to afford a mortgage but also the ongoing costs of homeownership, such as maintenance, property taxes, and insurance. In her view, if you’re unsure about your long-term financial stability or not ready to commit to the ongoing expenses of owning a home, waiting for the right moment might be a wise decision.
3. “Consider Market Trends and Personal Goals” — John Burns, Real Estate Analyst
John Burns, a highly regarded real estate analyst, looks at the issue from a more data-oriented perspective. He advises prospective buyers to look past the din of interest rates and concentrate on their personal situation. “Real estate is a personal decision, not just a financial one,” Burns says. “What matters most is whether buying fits into your long-term goals and lifestyle.
Burns says that while this may seem like a fine strategy, waiting for mortgage rates to fall, there is no guarantee the future market will be more suitable than it is at present. In fact, one can lose a perfect home while waiting. He suggests that if the present market fits your needs—whether because of a growing family or career changes—it may be time to go ahead with the purchase.
4. “Patience Might Pay Off in Certain Markets” — Redfin Chief Economist Daryl Fairweather
Redfin Chief Economist Daryl Fairweather is more measured with regard to buyers in overheated markets. She notes that while some regions are slowing down, others remain in high demand and may be more difficult for buyers to negotiate their way into.
Fairweather recommends patience for those in markets where housing prices are still too high for their budget. “In some cities, prices are starting to cool down as higher mortgage rates reduce demand. Buyers in these areas may find that waiting could yield better deals in the near future,” she says. However, for those in areas with limited inventory and strong demand, waiting could result in higher competition down the road.
What to Do?
Ultimately, the decision to buy real estate now or wait depends on a variety of personal factors. Here are a few questions to ask yourself before making the big decision:
– What is your financial situation? Make sure you have a clear understanding of your budget, including the costs of homeownership. Are you prepared for the monthly mortgage payments, property taxes, insurance, and maintenance costs?
– How long do you plan to stay in the home? If you’re planning to stay for many years, you might be able to ride out the short-term costs associated with higher mortgage rates. On the other hand, if you’re uncertain about your long-term plans, renting may be a better option.
– Are you in a buyer’s or seller’s market? The local market conditions will tell you if it is a good time to buy in your area of interest. Some markets have tight inventories, which may heighten competition, while others may be more buyer-friendly.
– How’s your risk tolerance? If economic uncertainty makes you nervous, waiting until things settle down might be best. If you’re okay with the risks of homeownership now, buying may make sense for you.
Conclusion
So, should you buy real estate now, or wait? The answer is not one-size-fits-all. The right decision depends on your financial readiness, long-term goals, and the market conditions in your area. Some experts argue that now is a good time to buy if you’re prepared for higher mortgage rates and are looking for a long-term investment. Others recommend patience, especially if you’re not financially ready or if your market is still overpriced.
The key is to weigh your options carefully, do your research, and consider your personal goals before taking the plunge. In that way, you can be sure you’re making the best decision for your future-whether that means buying now or waiting for a more favorable market.
