The Market Crash That Has Not Come and the Equity That Has Not Built

People have been waiting for interest rates to drop, home prices to fall, and the market to crash for years. And while they have been waiting prices in most markets have continued to climb. The renters who chose to wait have lost valuable years of equity building that they can never get back.

That is not a prediction about the future. It is a description of what has already happened.

Why Timing the Market Sounds Smart but Rarely Works

Trying to time the housing market sounds like a reasonable financial strategy. Wait for better conditions and then buy. The problem is that housing markets do not operate on the schedule buyers decide on while they wait.

The conditions that feel like they should produce lower prices and lower rates keep failing to materialize on the timeline buyers are counting on. And every month that passes while waiting is a month of rent paid into someone else's equity rather than your own.

The truth is that the best time to buy a home is when you are financially ready. As Judy Miller at Canopy Mortgage explains that means stable income, a manageable down payment, and a plan to stay in the area for at least three years. Those are the factors that make a home purchase make financial sense and they are all within your control in a way that interest rate movements and market conditions are not.

What Happens When Rates Actually Drop

Here is the part of the wait-for-lower-rates strategy that most people have not fully thought through. When rates do come down everyone who has been waiting is going to flood the market simultaneously. The buyers who have been on the sidelines for months or years all make the same decision at the same moment and the surge in demand that creates pushes prices back up.

The lower rate gets offset by the higher price paid for the home. The monthly payment may not look as different as expected. And the negotiating leverage that exists in a quieter market disappears completely.

The buyers who are in the market now while competition is cooler are capturing seller concessions, closing cost credits, and rate buydowns that will not be available when the rate improvement triggers a wave of returning buyers.

Date the Rate and Marry the Home

The framework Judy Miller uses with clients cuts through the complexity of the rate conversation cleanly. Date the rate and marry the home.

The rate is temporary. When rates drop the refinance conversation happens and the payment improves. But you cannot refinance your way into the home you passed on while waiting for a rate that may have already arrived and passed while you were deciding. The home you buy today at today's price is the foundation the refinance will eventually improve.

Give Judy Miller a call today to start building equity in a home rather than continuing to build equity in someone else's. Judy Miller is Branch Owner at Canopy Mortgage and would love to help you get started.

Sources

NAR.realtor
MortgageNewsDaily.com
ConsumerFinancialProtectionBureau.gov
Investopedia.com
BankRate.com