Waiting to buy a house is something you might regret.
- Home prices have increased by almost 19% in 2021.
- Despite higher prices, a real estate guru thinks buyers shouldn’t delay their home buying plans.
To say that today’s housing market is filled with inflated real estate prices might be an understatement. In 2021, home prices rose 18.8%, according to the S&P CoreLogic Case-Shiller National Home Price Index. This is the largest increase in 34 years, and easily outpaces the 10.4% rise in house prices in 2020.
If you’re inclined to put off your home search in light of these numbers, you’re probably in good company. But if you ask real estate expert Barbara Corcoran, that’s not necessarily a smart move.
Corcoran says it might not be worth the wait
House prices may be very high today, but there is a good chance that they will continue to rise. And for that reason alone, potential buyers may want to act as soon as possible, according to Barbara Corcoran.
As the founder of the Corcoran Group, a major real estate company and star of the hit series shark tank, Corcoran knows a thing or two about the housing market. And so it pays to heed the advice that Corcoran gave at the end of 2021, which is basically that it’s not wise to wait to buy a house.
Of course, this advice comes with a caveat. If you can’t find a suitable home, then obviously you may have no choice but to sit back and wait for more inventory to come on the market. Corcoran does do not advise to go out and buy a house that is not suitable just to close this transaction as soon as possible.
However, if you are able to find a home that meets your needs and is offered at a price you can vary, then it’s worth making an offer rather than waiting. If you put off buying your home in the hope that prices will drop, you may be disappointed.
Granted, there’s always a chance that home prices will start falling in 2022. But Corcoran said late last year that it doesn’t see that happening. And given that Goldman Sachs has predicted home prices will rise another 16% by the end of 2022, waiting is a risk many buyers can’t afford to take.
You may want to take advantage of today’s mortgage rates
Rising mortgage rates also provide an incentive to act as soon as possible. So far, rates are already higher than they were at any time in 2021, and that trend could continue as the Federal Reserve moves forward with plans to implement several rate hikes. rate this year.
The Fed is not responsible for setting mortgage rates or consumer borrowing rates. Rather, it dictates the rate banks charge each other for short-term borrowing. But Fed actions tend to impact mortgage rates, so buyers waiting to apply for a home loan could find themselves stuck with higher borrowing costs later in the year.
Should you delay buying a house?
If you haven’t saved enough to buy a home yet, or haven’t found a suitable home based on your personal criteria, wait pays off. But if you see homes you can afford that tick the right boxes, Corcoran says it makes sense to move on.
While house prices may fall this year, they could also rise. Combine that with steadily rising mortgage rates, and it’s clear that delaying the purchase comes with its share of risk.
A Historic Opportunity to Save Potentially Thousands of Dollars on Your Mortgage
Chances are interest rates won’t stay at multi-decade lows much longer. That’s why it’s crucial to act today, whether you want to refinance and lower your mortgage payments or are ready to pull the trigger on buying a new home.
Ascent’s in-house mortgage expert recommends this company find a low rate – and in fact, he’s used them himself to refi (twice!). Click here to learn more and see your rate. While this does not influence our product opinions, we do receive compensation from partners whose offers appear here. We are by your side, always. See The Ascent’s full announcer disclosure here.