Should You Buy a Home Now or Wait?

Should I buy now, or wait?

I hear this question from San Diego buyers all the time, and I completely understand why.

Buying a home is a big financial decision. Nobody wants to buy today and look back six months or two years from now and think, I should have waited.

Maybe rates will come down. Maybe prices will come down. Maybe there will be more inventory.

But what if they don't?

That's the problem with trying to perfectly time the real estate market. We only know the perfect time to buy after it's already passed.

A study by AD Mortgage looked at 23 years of housing data across all 50 states and Washington, D.C. They compared what happened when someone bought a home right away versus waiting two years to buy.

The result may surprise you.

Buying now came out ahead 61% of the time.

And here in California, the results were even more interesting.

What the study actually looked at

AD Mortgage compared two scenarios for every state and every year from 2000 through 2022: buy a home now or wait two years and buy later.

They looked at several basic factors, including:

• Home prices
• A 15% down payment
• Monthly mortgage payments based on the average interest rate at the time
• Additional savings accumulated during the two years a buyer waited

Whichever scenario resulted in the lower overall cost was considered the winner.

Across all of those scenarios, buying immediately came out ahead 61% of the time.

But here's the part that's really interesting:

In California, buying now won 74% of the time.

California and Florida actually had the highest "buy now" success rate in the study.

That doesn't mean buying today is automatically the right decision for every buyer. But it does challenge the idea that waiting is always the safer choice.

Why waiting for lower rates doesn't always work

This is probably the biggest reason buyers tell me they want to wait.

"I'm going to wait until rates come down."

I understand the thinking. A lower mortgage rate means a lower payment on the same loan amount.

The problem is that interest rates aren't the only thing moving.

Home prices can change.

Inventory can change.

Competition can change.

And if rates drop enough to bring a large number of buyers back into the market, then you will have a lot more competition for the same house. Because doesn't it stand to reason that you're not the only one waiting?

The study gives us a great example.

From 2013 to 2015, average mortgage rates dropped slightly, from 3.98% to 3.85%.

You might assume the buyers who waited got the better deal.

They didn't.

According to the study, buying in 2013, when rates were actually higher, came out ahead in 84% of the scenarios they analyzed.

Why?

Because the mortgage rate is only one piece of the equation.

There has never been a perfect formula

This may be my biggest takeaway from the study.

The winning strategy changed dramatically depending on the year.

From 2003 through 2005, buying immediately won in 94% to 100% of the scenarios.

During the housing crash from 2007 through 2010, waiting was the better financial outcome.

Then from 2015 through 2017, buying immediately came out ahead again in 92% to 100% of scenarios.

In 2018, the opposite happened. Buying immediately won in only 2% of the scenarios analyzed.

Then from 2020 through 2022, buying immediately won 100% of the time.

Looking backward, it's easy to see why.

The part that is impossible is knowing all of that before it happened.

And that's really the point.

Nobody knows exactly what the market will do next

I have been in real estate for over 20 years, and one thing I can tell you with certainty is that there is always a reason to wait.

Rates are too high.

Prices are too high.

Inventory is too low.

There's an election coming.

The economy feels uncertain.

Maybe prices will drop.

Maybe rates will drop.

There will always be something.

And I'm certainly not suggesting that everyone should run out and buy a house today. Sometimes waiting absolutely is the right decision.

But I also don't think you should put your life on hold trying to predict a market that none of us can predict perfectly.

The better question: Are you ready? Do your circumstances dictate that now is the time?

Instead of asking, "Is this the perfect time to buy?" I think there are better questions to ask:

Can I comfortably afford the monthly payment?

Do I have enough money for my down payment, closing costs and reserves?

Do I plan to stay in the home long enough for buying to make sense?

Is there a home available that actually works for me?

And most importantly:

Am I comfortable with the numbers today?

Because if the only way the purchase makes sense is if rates fall next year or if the home appreciates a certain amount, I'd probably tell you to wait.

But if you find the right home, you can comfortably afford it, you have the financial reserves you need, and you're planning to stay for a while, trying to perfectly time the market may not be worth it.

What this means for San Diego buyers

San Diego adds another layer to this conversation because our housing market is incredibly local.

What's happening in Rancho Bernardo can look completely different from what's happening in Encinitas, Solana Beach, Carlsbad or Rancho Santa Fe.

Even within the same neighborhood, one price range can favor buyers while another remains competitive.

That's why I don't think the decision should ever be simply, "Is now a good time to buy?"

The better question is:

Is now a good time for YOU to buy this particular home, at this particular price, with this particular payment?

That's a question we can actually answer.

You don't need to predict where mortgage rates will be two years from now.

You need to understand the numbers in front of you today, know what you can comfortably afford, and decide whether the right home fits into the life you're building.

Because the goal isn't to perfectly time the market.

It's to make a smart decision when the timing is right for you.