Wild fluctuations in home prices and interest rates over the last several years have forced a growing share of prospective homebuyers to sit back and wait for market conditions to improve. Rather than the home's location or must-have amenities, buyers are finding that the biggest deal breaker in today’s high-cost market is timing.
While mid-pandemic homebuyers locked in mortgage rates of around 2% or 3%, those financing today are settling for rates in the 6% to 7% range, according to Realtor.com. Instead of refinancing, sellers are biding their time, and some would-be buyers are playing the same waiting game. The question is, what time is the right time for homebuyers to come back to the market?
In the past several decades, good timing has tended to be less a matter of favorable prices and interest rates than of what happens in the housing market in the years after a purchase, said Jeffrey Zabel, an economics professor at Tufts University.
The problem for prospective buyers, Zabel said, is that even though timing matters, it is very hard to know in the moment if a certain time is fortuitous.
Buyers who missed out on the lower prices and rates earlier in the 2020s say it is sometimes hard not to focus on what might have been.
Diana Capozzi, a 39-year-old veterinarian, is bitter that the moment when she was ready to buy a house came near the end of a run-up in prices. She purchased a three-bedroom in Lebanon, N.H., in March 2022 for $570,000, about $170,000 more than it had sold for less than two years earlier.
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