After months of waiting on the sidelines due to high mortgage rates and affordability concerns, many prospective homebuyers finally have a window of opportunity. With mortgage rates trending downward, the current market presents a sweet spot for buyers—but this moment may be fleeting.
If you’ve been holding off on your plans to buy, here’s why now might be the time to make your move.
As you weigh your decision, consider this: What do you think other buyers are going to do?
The reality is, if mortgage rates continue to drop as experts predict, more buyers will flood back into the market. According to a recent Bankrate survey, over half of homeowners are motivated to buy this year if rates dip below 6% (see graph below):
With mortgage rates hovering in the low 6% range, we’re inching closer to that pivotal threshold. Once rates dip into the 5s, we’ll likely see a surge in homebuyer activity—and with more buyers comes more competition.
That uptick in demand could drive home prices higher, which might cancel out the benefits of waiting for slightly lower rates. As Nadia Evangelou, Senior Economist and Director of Real Estate Research at the National Association of Realtors (NAR), warns:
“The downside of increased demand is that it puts upward pressure on home prices as multiple buyers compete for a limited number of homes. In markets with ongoing housing shortages, this price increase can offset some of the affordability gains from lower mortgage rates.”
So, while holding off on your purchase might seem smart, rising prices could outpace any savings you’d gain from a minor drop in interest rates.
What This Means for You
Right now, you’re in a prime position to act before the competition ramps up. The current market offers a unique sweet spot for buyers. Why? Because many potential buyers are still sitting on the sidelines, which means less competition for you.
At the same time, affordability has significantly improved. Recent declines in mortgage rates are making homeownership more attainable. According to Mike Simonsen, Founder of Altos Research:
“Mortgage payments on a typical-priced home are 7% lower than this time last year and 13% lower than the peak in May 2024.”
Even better, while inventory remains low, it’s higher than it has been in recent years. Ralph McLaughlin, Senior Economist at Realtor.com, notes:
“The number of homes actively for sale continues to be elevated compared to last year, growing by 35.8%. This marks the 10th straight month of growth and now sits at the highest level since May 2020.”
This means you now have more options on the market than you’ve had in years.
With fewer buyers in the market, increased affordability, and more homes to choose from, you have a golden opportunity to find the right home before the competition heats up.
Why Waiting Could Cost You
If you’re waiting for the “perfect” time to buy, it’s crucial to remember that timing the market is nearly impossible. The longer you wait, the greater the risk that conditions will shift—and not necessarily in your favor. As Greg McBride, Chief Financial Analyst at Bankrate, cautions:
“Be careful what you wish for. A further drop in mortgage rates could trigger a wave of demand that makes it harder to actually buy a house.”
The Bottom Line
Don’t wait until the market heats up with more buyers and rising prices. You already have a rare opportunity to buy while the market is in your favor. Let’s connect and make sure you take advantage of this sweet spot before it’s gone.
