Is it a Bad Time to Buy?

The property market is a constant subject of scrutiny and debate. Today, the three major objections we hear to buying property are that prices can’t sustain recent growth, rates are high, and people not wanting to give up their low rate on their current home, even if their home isn’t supporting their current needs. But if history, economics, and the current landscape are any indicators, these objections might not hold as much water as one might think.

Here’s why:

1. The History of Housing Appreciation

There’s a common fear that property prices are in a bubble, and they might suddenly deflate. While certain markets that have experienced particularly rapid growth may see some correction, it’s essential to note that real estate appreciation is more common than not.

From 1943-1947, appreciation skyrocketed by 118%. But did the market crash after that? No, housing continued to appreciate for the subsequent 43 years. Since 1942, housing has appreciated 73 times, with only 7 instances of decline or neutrality. The take away? Betting against appreciation is betting against a trend that’s proven strong for over eight decades.

2. The Interest Rate Debate

Interest rates are undeniably high. But waiting for them to decrease might not be the smartest move. Here’s why:

• Scenario A: Rates decrease in the next 12-24 months. This reduction will inevitably bring back the competitive rush of buyers, driving prices up due to increased demand.
• Scenario B: Inflation remains, keeping rates high for a more extended period. In this scenario, there’s no better hedge against inflation than locking in your loan amount and monthly payment sooner rather than later.

3. Current Home Not Meeting Your Needs

Perhaps the most personal reason to buy is that your current living situation isn’t suitable for your needs any longer. Whether you’re renting or already own a home with a low rate, if your residence isn’t fulfilling your or your family’s needs, waiting might compound the problem.

The possibility of another year of  5% appreciation is not unlikely, and if  rates do go higher as some fear, either way, waiting makes future purchases more expensive. If rates do come down, you’ll find yourself amidst a buying frenzy, possibly missing out on your ideal home.

in a recent survey of Millennials who comprise the largest population of home buyers today, 67% said they would like to buy in the next 12-24 months. Inventory is still low and the pent up buying potential sitting on the sidelines is just waiting to jump into action when they feel comfortably to buy.