3 reasons to buy a home now (and 3 reasons to wait)

Homebuyers have experienced some turbulent times in recent years. 

Mortgage interest rates hovered near record lows during the height of the pandemic in 2020 and 2021. But, thanks to inflation and other economic factors, they have steadily risen since. By the summer of 2023, they had hit their highest level since 2000 but have since decreased a bit. At the same time, inventory has been limited as many existing homeowners have elected to keep their existing low interest rates and have stayed put.

2024, however, offers new hope for buyers. With the prospect of rate cuts significant, and, hopefully, an improvement in inventory to follow, many may be wondering if now is a good time to act or if they should wait a bit longer. Below, we'll break down three reasons to buy a home now and three reasons buyers may want to wait.

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3 reasons to buy a home now (and 3 reasons to wait)

Here are three reasons buyers may want to act now.

Rates are coming down

In anticipation of a cut to the benchmark interest rate courtesy of the Federal Reserve, interest rates have already started to drop in recent weeks. After hovering near 8% last fall, the average 30-year fixed mortgage rate was 6.98% on January 23. While not nearly as low as they once were, they are heading in a favorable direction for buyers, many of whom may want to lock in a rate now in case they tick up again.

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There's less competition

With rates where they are now, there's inevitably less competition for many buyers to contend with. While the competition depends on the local market, in general, buyers can expect to deal with less stress and fewer demands to overbid for a home now versus waiting for prices and rates to drop in the months to come.

They could lose their dream home

Your dream home won't come on the market every day. But when — and if — it does, you'll typically want to be aggressive, regardless of where rates are at that point. Instead, take the approach of "dating the rate and marrying the home." In other words, take the temporary rate now, buy the home and then look to refinance when rates stabilize. Just don't let the moment pass, because by the time rates come back down, it may already have been sold.

And here are three reasons homebuyers may want to wait it out.

Rates could drop further

On the other hand, acting now could leave homebuyers with a higher rate than if they had simply waited a few months. Many experts expect the Fed to cut their benchmark interest rate, possibly as soon as the spring. If that happens, mortgage rates will fall, too, leaving buyers with more savings than if they had acted prematurely. 

Prices may come down, too

Even if rates do come down later this year, the amount they fall will be negligible. For many sellers, then, the only remaining alternative to get buyers to act will be to cut prices. This scenario isn't likely to play out on a national level, but it's something buyers should keep in mind, particularly if they could realistically combine the ideal scenario of a lower rate and better price.

The warmer weather brings new opportunities

There's a reason why spring is normally considered an optimal time to purchase a home. Warmer weather provides more opportunities for buyers. The spring and summer months make house hunting easier and moving less troublesome. For parents of young children, it can also be advantageous and less disruptive if they can time their closing and moving for the summer when their children are home from school.

The bottom line

Your homebuying perspective is unique and will vary based on a series of personal factors. That said, rates are coming down right now and there's less competition on the market, making now an opportune time to act for many. Plus, waiting could result in the loss of your potential dream home. 

On the other hand, a delay in purchasing could lead to even lower rates if you act later this year (prices may fall, too). And the warmer weather will simply make for a better purchasing process than you'd have likely experienced in the winter. Ultimately, however, the timing surrounding a home purchase is a personal one. Start by exploring your options more carefully here to learn more.