Time in the Market Beats Timing the Market

by Ryan Ivemeyer

Time in the Market Beats Timing the Market




Deciding whether to buy a home now or wait involves weighing many factors, including current market conditions and your personal needs. Generally, trying to time the market isn't advisable because it's influenced by too many variables to predict accurately.

Experts often suggest that time spent in the market is more beneficial than trying to time the market. In other words, if you're ready to buy a home and can afford it, it's usually better to do so sooner rather than later. This approach is often recommended because it allows you to benefit from potential market growth over time. Bankrate provides further explanation on this viewpoint:

“No matter which way the real estate market is leaning, though, buying now means you can start building equity immediately.” 

To illustrate the benefits of buying now versus later—if you're in a position to do so—consider the data from Fannie Mae's Home Price Expectations Survey. This quarterly survey collects forecasts from over one hundred economists, real estate experts, and investment and market strategists about the expected trends in home prices over the next five years. According to the latest survey results, experts predict that home prices will continue to rise through at least 2029, albeit at a slower, more sustainable pace than the rapid increases seen in previous years (see the graph below):

a graph of a number of green rectanglesBut what does this mean for you practically? To put these projections into context, the graph below illustrates how a typical home value could appreciate over the next few years based on the Home Price Expectations Survey (HPES) projections. This visualization shows the potential equity you could begin to accumulate if you purchase a home in early 2025 (see graph below). This demonstrates the financial benefits of buying sooner rather than later, as the projected increase in home values can significantly enhance your home equity over time.

a graph of growth of a house

In this scenario, imagine you buy a $400,000 home this January. According to expert forecasts from the Home Price Expectations Survey (HPES), you could see an increase in household wealth of more than $83,000 over the next five years. That's a substantial amount of equity you would miss out on by continuing to rent.

Despite the challenges in today's market, the potential long-term benefits make buying a home worthwhile. If you're aiming to purchase a home, don't get discouraged—there are creative solutions that can make it feasible. You might consider exploring more affordable areas, looking into condos or townhomes, or investigating down payment assistance programs. These options can help turn your homebuying aspirations into reality.

While it might be tempting to wait for the "perfect" time to buy, trying to time the market precisely could mean missing out on significant financial gains. Ultimately, the decision is yours, but it's important to weigh what you could be foregoing by waiting.

Bottom Line

If you're unsure whether to buy now or wait, remember that it's the time spent in the market, not timing the market, that really counts. If you'd like to discuss what steps you need to take to begin the home buying process today, let's connect. I'm here to help you get started and make the most of the opportunities available right now.

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Ryan Ivemeyer

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