Why You Shouldn't Wait Out the Market to Buy a House, According to the Pros

Rising interest rates and whispers of a recession have caused some hopeful homeowners to second-guess their plans to buy a home this year. However, many experts predict that housing demand is expected to continue to outpace supply in the real market for at least the next five years, which means that now may be the ideal time for people who are currently in a position to buy to make their move.

Some people may be a little hesitant to buy right now because they still remember what happened during the subprime mortgage crash in the early 2000s. But according to Yousif Mohamed, senior loan officer at Movement Mortgage, real estate is normally a pretty secure investment. "Historically, home prices never depreciate. So no matter how much you paid for a home in the past, it will always be worth more in the future," he says. "So instead of assuming you'll get a better deal if you wait, run the numbers to see if the property you want to buy is within your budget."

Mohamed suggests asking yourself questions like: Is the monthly payment manageable? Is the down payment attainable? "A good deal is all relative. Every deal is a good deal, especially if you come from a property you were renting from someone else."

Unfortunately, Bryce Fuller, realtor/broker at Baird & Warner in Glenview, Illinois, says there's no such thing as a crystal ball when it comes to real estate. "The financial markets are too volatile to guess. Interest rates are affected by banks, investors, world events, public policy, and supply and demand as well as countless other factors," he says. "In 2019, we could never have predicted what was going to happen in 2020 and how our economy was going to be affected." This is why he tells his clients to take the guesswork out of buying and work with what they know is a sure thing at the moment. "You know what the interest rates are and what the prices are — take advantage of it!"

Fuller also believes that buying now eliminates a lot of the back and forth about what could have been. "Are you going to pay more than your neighbors did a year ago?" he asks. "Probably. Will you know what your payments will be for the rest of your loan? Definitely." Fuller says that by buying now, you will never have to worry if your payments will change. "There is no landlord who can raise your rent. Buying a home is a huge win against inflation."

For Paige Hawley, senior manager of origination for Morty, it all boils down to what your financial situation is telling you to do. "While interest rates have gone up from last year, it's really about your own timeline more than the state of the market," she says. "Ask yourself how long you plan to stay in your next home and think about your total cost (including things like taxes, maintenance, and insurance in addition to your mortgage payment). How does it stack up against the amount you'll be spending on rent in the same period?"

In other words: If you're going to benefit from making a move today, it doesn't really matter how the rest of the real estate-market looks. "Right now, we're seeing buyers who are ready to buy but have been waiting on the sidelines over the past few months hop back into the market," she says. "Just because rates have moved higher from the historic lows of 2020 and 2021 doesn't mean it's a bad time to buy."

Even though the Federal Reserve Bank (aka the Fed) did recently move to make back-to-back rate hikes that resulted in the largest interest rate jump in decades, Hawley says those figures are still historically low. "While rates were even lower over the past few years, low rates and low inventory created an unhealthy level of competition that made it extremely challenging for buyers," she says. "As the market has cooled, we're seeing this level off into a bit of a new normal. While rates are higher and affordability has been impacted, the market is more accessible in some ways."

All of the experts we spoke with can agree that it's hard to predict what will happen in the next five years, which is why it's so important for every buyer to operate within their own timeline and follow their own budget. Otherwise, you run the risk of waiting so long to time the market perfectly that you end up missing out all together.