Here’s Why It Might Be the Best Time
By Dwight Sandlin, Chairman of the Board of Signature Homes
A question I’ve been asked time and again is: “Is now a good time to buy a home?” My resounding answer is YES! In fact, an even better question would be, why not? Let me walk you through four logical reasons why I believe now is the perfect time to invest in a home. Hopefully, this will provide clarity as you consider your next move.
1. Home Prices Are at Record Highs—But That’s Not Necessarily Bad
Home prices in the United States are at an all-time high, with values increasing by 5.5% over the past year alone. Historically, higher mortgage rates have led to falling prices, but this is not the case today. Over the last two years, mortgage rates have been at their highest in 20 years, yet home prices continue to rise. This is a unique scenario where price appreciation persists despite elevated borrowing costs, signaling robust demand and market confidence. Waiting could mean missing out on current opportunities to lock in home values before they climb even higher.
2. The U.S. Faces a Major Housing Shortage
There simply aren’t enough homes available to meet the demographic needs of the country. Experts estimate that the U.S. is short by at least 2 million homes. This shortfall creates an incredibly competitive market for available properties. Homebuilders are eager to ramp up production to meet demand, but challenges like land affordability and labor shortages are holding them back. As a result, the housing shortage is unlikely to improve anytime soon, which means demand will continue to outpace supply, likely pushing prices even higher.
3. Interest Rates Have Recently Dropped—Making Homes More Affordable
Over the past few months, interest rates have come down significantly. For instance, a $450,000 mortgage payment has been reduced by $500 per month. Imagine the impact of saving $500 every month for the same mortgage—this is a game-changer for many potential buyers. Lower monthly payments are expected to fuel increased demand for homes, and as history shows, more demand usually leads to higher prices.
If you’re thinking of waiting for rates to drop further, it might cost you more in the long run due to rising home prices.
4. Should You Buy or Rent? Buying Offers Clear Long-Term Benefits
Some might wonder if they should buy a home or continue renting. With lower interest rates, the cost difference between buying and renting might be smaller than you think—especially when you consider the tax benefits of homeownership. For example, let’s say you purchase a $350,000 home today. In two years, assuming a modest 5.5% rate of inflation, that home could be worth $390,000. Not only would you have a more valuable asset, but you’d also have accumulated significant equity that could be used for future investments or to upgrade to a new home.
Renting, on the other hand, builds no equity and offers no long-term financial gains.
Final Thoughts: Why Wait?
The combination of record-high home prices, a shortage of available properties, declining interest rates, and the long-term financial benefits of homeownership all point to one conclusion: now is the time to buy. However, keep in mind that not all communities appreciate at the same rate, so do your research to find areas that have strong potential for value growth.
Also, before you start the home-buying process, consult with a mortgage lender to get pre-approved. This will give you the confidence and ability to make a competitive offer when you find the right property. Many lenders also offer programs that can make the buying process more affordable than you might expect.
So, if you’re thinking about buying a new home, don’t hesitate—this could be the best decision you make for your financial future.
Thank you for reading, and I hope this information helps guide your next steps!
Dwight Sandlin is the Chairman of the Board at Signature Homes, where he offers valuable insights on home buying and the current real estate market.