Should you buy a home now or wait?
It's one of the biggest questions facing buyers in today's market.
Last week, Nick and I attended the national Realtors conference in New Orleans, where we heard directly from two of the country's leading housing economists.
During the discussion, someone asked whether buyers should wait.
The answer was no—but not because everyone should rush out and purchase a home.
The bigger message was that buyers who are financially prepared shouldn't automatically assume waiting will create a better opportunity.
That's especially interesting when you look at what's happening in the housing market right now.
Home sales are unusually slow. Affordability remains difficult. Mortgage rates have kept many buyers on the sidelines.
And yet, home prices in most markets have continued to rise.
A Slow Housing Market Doesn't Necessarily Mean Falling Prices
Housing activity has slowed considerably.
Pending home sales recently reached their lowest level since tracking began in 2001, marking the fourth consecutive year of declines.
When fewer homes are selling, it's easy to assume prices should be falling too.
But that's not what has been happening across most of the country.
During the third quarter, 78% of markets recorded year-over-year home price increases.
The national median price also increased by nearly 2%.
Of course, real estate is local.
Some communities may experience declining prices while others continue appreciating. Individual properties can perform very differently too.
But nationally, slower sales haven't translated into widespread falling home prices.
That's important for buyers who are waiting specifically because they expect today's slower market to eventually produce significantly cheaper homes.
Why Are So Many Buyers Still Waiting?
If home prices remain relatively strong, why are fewer people buying?
Affordability is a major reason.
When mortgage rates climbed from the historically low levels buyers saw earlier in the decade, the monthly cost of purchasing a home changed dramatically.
A buyer could look at the same purchase price and suddenly face a much larger monthly payment.
That pushed some buyers out of the market.
It also gave many existing homeowners a reason not to sell.
Someone with a very low mortgage rate on their current home may be reluctant to give it up and take on a new loan at today's rates.
That combination has helped create an unusual market:
Fewer buyers are moving, but fewer homeowners are listing too.
With limited supply still supporting prices in many areas, lower sales activity hasn't necessarily produced the discounts some buyers expected.
Don't Judge Affordability by the Mortgage Rate Alone
Mortgage rates matter.
There's no getting around that.
But they're only one part of what determines whether you can comfortably afford a home.
Buyers should look at the entire monthly housing expense, including:
Principal and interest
Property taxes
Homeowners insurance
Condo or HOA fees when applicable
Maintenance and repairs
Utilities and other property-specific expenses
The question isn't simply whether today's mortgage rate is attractive.
It's whether the total cost of owning the home fits comfortably within your budget.
That's a much more useful way to evaluate a purchase.
If the payment stretches your finances too far, waiting may be the smarter move.
But if the numbers work comfortably today, waiting solely because you're hoping for a lower mortgage rate may not automatically put you in a better position.
Homeownership Has Created Significant Wealth
Another major topic at the conference was the relationship between homeownership and household wealth.
The data presented showed that the typical homeowner has accumulated nearly $200,000 more in wealth than before COVID.
That doesn't mean every homeowner made $200,000 simply because they owned a house.
But home equity can become a significant part of someone's long-term net worth.
As homeowners make mortgage payments, part of those payments can reduce the amount they owe.
If the property also appreciates over time, their equity can grow further.
That's one reason homeownership has historically played such an important role in household wealth.
The Homeowner-Renter Wealth Gap Is Significant
The economists also highlighted the difference in net worth between homeowners and renters.
The typical homeowner's net worth was around $400,000.
For the typical renter, it was approximately $10,000.
Those numbers need some context.
Owning a home isn't the only reason homeowners may have greater wealth. Differences in income, age, savings, investments, and other financial circumstances also matter.
And buying a house doesn't guarantee that someone will become wealthy.
But homeownership provides something renting doesn't: the opportunity to build equity in an asset you own.
Over a long enough period, that can become an important part of someone's overall financial picture.
Waiting Can Still Be the Right Decision
None of this means every buyer should purchase a home today.
There are plenty of good reasons to wait.
If your income isn't stable, buying may not make sense yet.
If purchasing a home would leave you with almost nothing in savings, building a larger financial cushion could be more important.
If the monthly payment would stretch your budget too far, don't force it.
And if you're likely to move again soon, buying may not fit your plans.
Waiting can be a smart financial strategy.
The important part is understanding why you're waiting.
There's a difference between waiting because you're actively strengthening your finances and waiting because you're hoping the market eventually delivers the perfect combination of lower rates and lower prices.
One gives you something you can control.
The other depends on predicting what happens next.
Don't Base Today's Decision on Yesterday's Housing Market
Buying a home is a major financial decision, so it's natural to ask family and friends for advice.
But housing markets change.
Someone who bought their first home decades ago may have experienced completely different home prices, mortgage rates, inventory levels, lending standards, insurance costs, and competition.
Their experience can still be valuable.
It just shouldn't be your only source of information.
Today's buyers need to understand today's market.
That means looking at current homes for sale, current financing options, current property taxes and insurance costs, and—most importantly—your current financial situation.
Good advice should help you understand the decision in front of you rather than simply tell you what worked for someone else years ago.
What Happens When More Buyers Come Back?
There's another reason buyers should pay attention to what's happening now.
The desire for homeownership hasn't disappeared.
Many potential buyers are simply waiting because affordability is difficult or they're uncertain about the economy and housing market.
If mortgage rates improve, affordability gets better, or consumer confidence increases, some of those buyers could return.
And an easier mortgage environment doesn't necessarily mean an easier buying environment.
More buyers can also mean more competition for available homes.
That's why waiting for conditions to improve doesn't guarantee that buying will suddenly become simple.
The market may improve in one area while becoming more competitive in another.
Buyers Are Still Turning to Real Estate Agents
Despite all the challenges in today's housing market, buyers and sellers are continuing to seek professional help.
According to the figures shared at the conference, approximately 90% of buyers and 92% of sellers worked with a real estate agent.
That's particularly interesting in a market where consumers have access to more real estate information online than ever before.
But more information doesn't always make the decision easier.
Buyers still have to evaluate properties, understand local pricing, navigate inspections, compare financing, negotiate offers, review contingencies, and make decisions involving hundreds of thousands of dollars.
When the market becomes more complicated, having someone who understands the current conditions can become even more valuable.
What Rhode Island Buyers Should Focus on Right Now
National housing statistics can tell us where the broader market is heading.
They can't tell you whether you should buy a home.
That decision starts with your own finances.
If you're considering buying in Rhode Island, ask yourself:
Can I comfortably afford the total monthly payment?
Will I still have adequate savings after my down payment and closing costs?
Do I have reserves for repairs and unexpected expenses?
Does the property fit my needs for the next several years?
Would I still feel comfortable with the purchase if mortgage rates didn't immediately fall?
If the answer to those questions is no, you may need more time.
That's okay.
But if you're financially prepared and you find the right property at a payment that works, today's slower housing market shouldn't automatically scare you away.
Thinking About Buying a Home in Rhode Island?
There will always be another housing headline telling buyers why they should act—or why they should wait.
That's why the decision shouldn't start with the headline.
It should start with your numbers.
At Slocum Home Team powered by eXp Realty, we can help you understand what buying in today's Rhode Island market would actually look like based on your budget and goals.
We'll help you evaluate your options, connect you with a trusted lender, and look at the current market so you can make an informed decision without trying to predict exactly what happens next.
And after hearing directly from some of the country's leading housing economists at the national Realtors conference, the message was clear:
If you're financially ready, don't make your decision based solely on fear of today's market. Make it based on whether the numbers work for you.
