Focus on Time in the Market, Not Timing the Market

Is it better to buy a home now or wait? We get asked this question almost daily! The right timing for you will depend on personal factors, but here's something to consider: If you can purchase at today's rates and prices, it may be wiser to focus on time in the market rather than trying to time the Kansas City housing market.

The Downside of Trying To Time the Market
Trying to time the market can be flawed because things can change. For example, despite projections earlier this year suggesting that mortgage rates would decrease, shifts in various market and economic factors have delayed this. These shifts have impacted homebuyers waiting for lower rates, as they have yet to take advantage of the opportunity to enter the market. As a result, mortgage rates have stayed higher for longer than expected, keeping monthly housing payments elevated, and affordability has yet to improve for those who choose to wait. Therefore, if you're ready and able to buy now, waiting for the perfect timing may not pay off.

The Proof: How Homeowners Benefit from Rising Home Prices

Delaying your plans means missing out on the equity you would gain if you made your purchase today. The potential equity gains at stake may surprise you.

Fannie Mae releases the Home Price Expectations Survey every quarter. The survey asks over one hundred economists, real estate experts, and investment and market strategists about their forecasts for home prices over the next five years. In the latest release, experts project that home prices will continue to rise through at least 2028 (refer to the graph below):

Let's analyze the potential gains after purchasing to provide context for these numbers. The chart below illustrates how, based on HPES projections, the value of a typical home may increase over the next few years.

For example, if you purchased a $400,000 home at the beginning of this year, HPES forecasts suggest you could accumulate over $83,000 in wealth over the next five years. This substantial amount highlights the importance of being in the market for the long term.

The Advice You Need To Hear If You're Ready and Able To Buy Now

You might be thinking a lot about mortgage rates in the Midwest, and how they affect your monthly payment, but remember to consider home prices. Prices are expected to keep rising but at a slower pace. While a slower increase in prices may not be ideal for you now, it will be beneficial once you own a home - this is the "time in the market" concept.

You could wait for the perfect time to buy, but missing out on potential equity is something to think about seriously. If you're ready and able to buy now, you must decide: Is it worth waiting?

Instead of trying to time the market, it's better to have time in the market.

As U.S. News Real Estate summarized, there's never a one-size-fits-all answer to whether now is the right time to buy a home. There's also no way to predict precisely what the market will do in the near future. Perfectly timing the market shouldn't 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
Remember: it's better to focus on time in the market rather than timing the market when making investment decisions. If you're eager to start and position yourself for substantial equity gains, let's connect and make it happen. Reach out to the Just Say Home KC team at 816-656-2816!

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