“I’ll buy when things settle down.” It’s one of the most common things we hear from prospective buyers, and it could be one of the most costly assumptions in real estate. Waiting isn’t a neutral choice. It’s a financial decision, and it comes with its own price tag.
Home values have historically trended upward1 over time in most markets, even when things cool in the short term. If you’re eyeing a home today, even modest annual appreciation means that same home could cost significantly more a year from now—and even more in two. The “I’ll get a better deal later” theory only holds up if prices grow slower than your savings.
There’s a rate-and-price relationship many buyers miss, too. If interest rates drop, buyer demand often follows. More buyers competing for the same homes can mean higher prices and bidding wars. Waiting for a better rate can mean walking into a more crowded, more expensive market instead of a better deal.
Even a one-point rate increase adds up fast, and that difference can stack up over the life of a loan. That means the same home and mortgage but with a bigger bill each month.
This is where a fixed-rate mortgage works in your favor. With a fixed rate mortgage your principal and interest payment holds steady throughout the loan term. While taxes, insurance premiums, and other housing-related costs may change over time, a fixed-rate mortgage can provide greater payment predictability. If rates do drop down the road, refinancing may be available, subject to qualification and market conditions.
Renters are missing out on an important financial building block: home equity. A portion of every mortgage payment goes toward paying down your loan balance, which may steadily build equity over time. The longer you rent while waiting for the right time to buy, the longer you’re putting off establishing your own equity.
When you wait to buy, you’re risking more than just price and rate. You also risk selection. The floorplan, homesite or community you have your eye on today may not be available next year, or even next month. Buyers who wait too long may find that the home they loved is gone, and what’s left may not fit the life they were planning for.
When you add it up, waiting comes with its own costs. The perfect moment you’ve been waiting for may never arrive, but the right home, at the right payment, might be available right now.
From move-in ready inventory to limited-time incentives and low promotional rates through Lennar Mortgage, LLC, homeownership may be closer than you think. To learn more or find a Lennar community near you, visit www.lennar.com.
DISCLAIMER
1 https://fred.stlouisfed.org/series/CSUSHPINSA
The content provided herein is for informational purposes only. Nothing herein shall constitute legal, tax, investment or financial advice. No representation is made regarding the value of a home over time, future housing market performance, your ability to qualify for a home loan, or the availability of a home or loan product that meets your needs. Financing is available through Lennar’s affiliate Lennar Mortgage, LLC, but use of Lennar Mortgage, LLC is not required to purchase a home (See Affiliated Business Arrangement Disclosure: https://mcv0gwmvppxkjtntxgnb0-0xn53y.pub.sfmccontent.com/2wss1jvor1f). Lennar Mortgage, LLC, is an Equal Housing Lender, NMLS # 1058. For licensing information, visit https://www.lennarmortgage.com/Licensing.
