Why Waiting May Cost Buyers More Than They Think

Is It a Good Time to Buy a House? Why Waiting Could Cost You

If you are waiting on the sidelines for the “perfect” moment to buy a home, recent economic data suggests that this strategy might end up costing you more in the long run.

While holding out for lower rates or a drop in home prices feels like the safe play, the underlying economic factors moving the market right now tell a very different story. Let’s break down the latest shifts in oil, inflation, and housing data to see exactly where the market is heading.

1. Oil Prices and Improving Mortgage Rates

We saw a notable shift as oil prices dropped below $90 a barrel, hitting $87 due to renewed optimism regarding geopolitical tensions in Iran.

Why does this matter to a home buyer? Energy prices are a massive driver of inflation. When oil drops, inflation pressures ease, giving the bond market a breather. Because of this movement, mortgage rates improved across the board. Depending on your specific loan program, we saw interest rates drop anywhere from a quarter to a half percent lower.

2. Inflation Signals: The Federal Reserve’s Next Move

The Federal Reserve’s favorite inflation metric—the Personal Consumption Expenditures (PCE) index—came in better than feared.

• The Headline PCE: Rose 0.4% on a monthly basis.
• The Core PCE: (Which removes volatile items like food and energy) rose just 0.2%.

On an annualized basis, headline inflation moved up to 3.8%, while core inflation sits at 3.3%. While the cooling core number gave the bond market a sigh of relief, both numbers remain above the Fed’s strict 2% target.

The Takeaway: Because inflation remains sticky, the Federal Reserve is highly unlikely to cut its benchmark interest rates anytime soon. If you are waiting for a massive Fed rate cut before you shop for a home, you might be waiting a long while.

3. Economic Growth Is Slowing down

We also received the first-quarter Gross Domestic Product (GDP) numbers, which track the overall health and output of the economy. The GDP growth rate was revised downward from 2.1% to 1.6%. When looking closer at core goods (excluding defense and aircraft purchases), growth dropped to 1.1%.

This cooling economic growth, paired with falling energy prices, is exactly what needs to happen for long-term inflationary pressures to pull back, which will eventually pave the way for more stable mortgage rates.

4. The Real Story Behind Housing Inventory and Sales

The media often uses scary headlines to imply the housing market is on the verge of a cliff, but the actual data shows a highly stable, flat environment.

New home sales came in at 622,000, marking a 6% decline month-over-month and an 11% decline year-over-year. However, if you look at the three-month and six-month moving averages, housing activity is flat, not collapsing.

The Bottom Line: The Cost of Waiting

Waiting for flawless market conditions gives a false sense of security. As oil prices normalize and inflation pressures ease, mortgage rates will continue to find a lower baseline. When that happens, a wave of buyers who have been sitting on the sidelines will jump back into the market, driving home prices even higher.

If home prices continue their upward trajectory, buying a home later will mean paying a premium—making “waiting” the most expensive decision a buyer could make this year.

If you are thinking about buying, right now is the time to build your strategy before the competition heats up.

📅 Real Estate Professional & Agent Corner

• Need a Scenario Scored? My team and I are available seven days a week, from 8:00 AM to 8:00 PM, to answer your questions or get your buyers pre-approved. Reach out anytime!
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Brian@BrianManningTeam.com

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