Thinking about buying a home? If so, you’re probably wondering: should I buy now or wait?
Today’s high mortgage rates and concerns of inflation may have you questioning when the right time to buy a home is. Buying a home can offer stability and incredible long-term benefits–benefits that compound over time. Like any investment, the earlier you start, the better the rewards in the future.
While nobody can make this important decision for you, here is some information that can help you decide.
What’s Next for Home Prices?
Each quarter, Fannie Mae and Pulsenomics publish the results of their Home Price Expectations Survey, known as HPES. It asks more than 100 experts—economists, real estate professionals, academic experts and investment strategists—what they think will happen with home prices from this year until 2028.
In their latest survey, those experts projected that home prices are going to keep going up for the next five years.
Looking at the data in this graph, experts are not expecting any price declines. Instead, experts predict that we will see a 3-4% rise each year. What this means for homebuyers is that a home you purchase this year is projected to increase in value.
This is a larger expected increase than the HPES’s last estimate. According to Fannie Mae, “the panel’s latest estimates of national home price growth are higher than last quarter’s expectations of 2.4% for 2024 and 2.7% for 2025.”
And even though home prices aren’t expected to climb by as much in 2025 as they are in 2024, keep in mind that these increases add up over time. If these experts are right and your home’s value goes up by 3.78% this year, it’s set to grow another 3.36% next year. And another 3.87% the year after that.
What Does This Mean for Homebuyers?
Knowing that prices are forecasted to keep going up should make you feel good about buying a home now. That’s because it means your home is an asset that is projected to grow in value in the years ahead.
If you’re not convinced yet, maybe these numbers will get your attention. They show how a typical home’s value could change over the next few years using the current expert projections from the HPES. Check out the graph below:
In this example, imagine you bought a home for $400,000 at the start of this year. Based on these projections, you could end up gaining over $83,000 in household wealth over the next five years as your home grows in value. This $83,000 is monumental, and can provide stability for you and your family for years to come.
In addition, there are more homes on the market than before. The latest data from Realtor.com indicates that there are more homes on the market this year than in the past several years.
And with the housing supply increasing, there are even more choices compared to the past three years. But while the supply of houses is increasing, demand is still high, meaning the earlier you start looking for a home, the better.
Should I wait?
Of course, you could also wait. Certain situations may make waiting make more sense. But if you are able, consider taking the steps today to purchasing your home. Based on expert projections and the high demand of homes, waiting to buy a home could end up costing you more in the long run.
Bottom Line
If you’re thinking it’s time to get your own place and you’re able to do so, buying now might make sense. While the HPES projections are in no way set in stone, they illuminate the power of buying now and reaping the benefits later. Your home is expected to keep getting more valuable as prices go up.
At Seven Gables, our experienced agents can help you navigate the real estate landscape and get you the home of your dreams. Team up with a Seven Gables agent today to secure your future.
