In the dynamic world of real estate, timing is everything.
As trusted advisors to homebuyers, we understand the significance of making informed decisions in a market that’s as unpredictable as it is promising. Today, we’re here to shed light on a crucial aspect often overlooked: the cost of waiting to buy a home.
The 2025 real estate market presents opportunities for those prepared to act. Potential buyers often wait for market conditions to improve. But the old adage runs true: time in the market is better than timing the market.
As buyers wait, home values consistently trend upward, with an average annual appreciation of 5%. Waiting to buy means paying more for the same property, even if interest rates fall slightly.
Consider the following example, using a $500,000 home and assuming a 5% appreciation:
| Timing | Home Price Estimate | Example Interest Rate | Mortgage Payment | Total Annual Savings Based on Monthly Payment | Loss of Wealth | Net Negative Wealth |
| Current Price | $500,000 | 7% | $2,661 | |||
| Wait 1 Year | $525,000 | 6.50% | $2,655 | $72 | $25,000 | $24,928 |
| Wait 2 Years | $551,000 | 6% | $2,643 | $216 | $51,000 | $50,784 |
| Wait 2 Years | $551,000 | 5% | $2,366 | $3,540 | $51,000 | $47,460 |
Waiting even one year adds $25,000 to the home’s value, which translates into a higher purchase price of the home and a larger loan amount.
What about interest rates? If rates drop from 7% to 6.5%, a buyer may see a reduction in monthly payments. But they will likely be offset by a higher home price. Over the life of a 30-year loan, the wealth lost from paying more for the home could exceed the savings achieved with a slightly lower interest rate.
While buying a house right now might feel overwhelming, the cost of waiting can be a burden on finances down the road. If now’s the time to buy, connect with a Howard Hanna agent today to get started.
