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Focus on Time in the Market, Not Timing the Market

Thursday, June 27, 2024   /   by Dick Keenan

Focus on Time in the Market, Not Timing the Market

Should you buy a home now or wait? This is a common question, and while the right timing depends on personal factors, there’s an important aspect to consider: if you can afford to buy at today’s rates and prices, focusing on time in the market is often more beneficial than trying to time the market.


The Pitfalls of Timing the Market


Attempting to time the market can be risky because conditions change frequently. For example, many forecasts predicted mortgage rates would drop this year. While experts still believe this will happen, various economic factors have delayed the decrease. U.S. News explains:


“Those who put off buying a home during the past few years as they were holding out for lower mortgage rates have been left out of the market . . . mortgage rates have stayed higher for longer than previously expected, keeping monthly housing payments elevated. In other words, affordability didn't improve for those who chose to wait.”


This illustrates why trying to time the market may not be advantageous if you’re ready to buy now.


The Benefits of Rising Home Prices


Delaying your purchase also means missing out on potential equity gains. The Fannie Mae Home Price Expectations Survey, which gathers input from over a hundred economists and real estate experts, predicts home prices will continue to rise through at least 2028.


Example of Equity Gains


Let’s say you bought a $400,000 home at the beginning of this year. Based on expert forecasts, your home could appreciate significantly over the next five years. The projections suggest you could gain over $83,000 in household wealth during this period.


This potential for equity growth highlights why time in the market is crucial.


Advice for Ready and Able Buyers


While mortgage rates and monthly payments are important considerations, don’t overlook the expected rise in home prices. Even a moderate increase in prices can benefit you once you own a home.


Trying to perfectly time the market might mean missing out on substantial equity gains. If you’re in a position to buy now, weigh whether waiting is truly worth it.


As U.S. News Real Estate states:


“There's never a one-size-fits-all answer to whether now is the right time to buy a home. . . . There's also no way to predict precisely what the market will do in the near future . . . Perfectly timing the market shouldn't be the goal. This decision should be determined by your personal needs, financial means, and the time you have to find the right home.”


Bottom Line


If you’re deciding whether to buy now or wait, remember that time in the market is often more valuable than trying to time the market. If you’re ready to start and want to set yourself up for potential equity gains, let’s connect and make it happen.


  real estate, central coast, home buyer, home purchase, home ownership, new home, home owner, first time home buyer, housing affordability, housing economy, equity, real estate projections, home equity

The Keenan Carter Group
Richard Keenan And Narlene Carter Keenan
350 James Way, Ste 130
Pismo Beach, CA 93449
805-773-7711
Keller Williams Realty Central Coast DRE# 02005015
The Keenan Carter Group DRE# 00860187
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