After months of waiting on the sidelines, many homebuyers who were priced out by high mortgage rates and affordability issues now have the chance to make their move. With rates trending down, today’s market offers a sweet spot for buyers—but it may not last long.
So, if you’ve been postponing your move, here’s why you might not want to wait any longer.
As you consider your options and whether to buy now or wait, ask yourself: What do you think everyone else will do?
The reality is that if mortgage rates continue to decline, as experts predict, more buyers will re-enter the market. According to a survey from Bankrate, over half of homeowners would be encouraged to buy this year if rates fall below 6% (see graph below):
With rates currently hovering in the low 6% range, we’re nearing that crucial threshold. If they dip into the 5% range, buyer demand will rise, leading to increased competition for you.
This heightened demand is expected to push home prices higher, which could offset some of the benefits of a slightly lower interest rate. As 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 upward 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.”
Although waiting to buy might seem like a wise decision, it could backfire if rising prices outstrip the savings you gain from slightly lower rates.
What This Means for You
Right now, you have the opportunity to stay ahead of the curve. The current market is a buyer’s sweet spot. Why? Many other buyers are waiting, which means fewer people are actively searching for homes. This results in less competition for you.
At the same time, affordability has significantly improved. Recent declines in mortgage rates have made homeownership more attainable. As Mike Simonsen, Founder of Altos Research, states:
“Mortgage payments on the typical-price home are 7% lower than last year and are 13% lower than the peak in May 2024.”
Although the supply of homes for sale remains low, it is also higher than it has been in years. According to Ralph McLaughlin, Senior Economist at Realtor.com:
“The number of homes actively for sale continues to be elevated compared with last year, growing by 35.8%, a 10th straight month of growth, and now sits at the highest since May 2020.”
This means you now have more choices available than you have had in a long time.
With fewer buyers in the market, increased affordability, and a greater selection of homes, you have the opportunity to find the right one before competition intensifies.
Why Delaying Might Be Costly
If you’re holding out for the perfect moment to buy, it’s crucial to recognize that timing the market is almost impossible. The longer you wait, the greater the risk that market conditions may change—and not necessarily to your advantage. As Greg McBride, Chief Financial Analyst at Bankrate, notes:
“It’s one of those things where you should be careful what you wish for. A further drop in mortgage rates could bring a surge of demand that makes it tougher to actually buy a house.”
In Conclusion
Don’t wait until you’re faced with increased competition and higher prices—you have the opportunity to buy a home in today’s sweet spot. Reach out to a
Benson & Mangold agent to ensure you make the most of it.
