If you’re thinking about buying a home right now, nobody could blame you for feeling a little
overwhelmed.
The Federal Reserve just raised the federal funds rate by a quarter percentage point. Mortgage
rates are hovering near 7%. Gas prices have climbed sharply. Conflict in the Middle East
continues to affect energy markets. A federal election is approaching in November. And just
beyond that are Thanksgiving, Christmas and the beginning of another year.
That is a lot of noise.
On September 16, the Federal Reserve raised its target rate to 3.75%–4.00%. Freddie Mac
reported the following day that the average 30-year fixed mortgage rate was 6.95%. AAA
reported the national average for regular gasoline at $4.43 per gallon, more than $1 higher than
a year earlier. Meanwhile, the U.S.-Iran conflict continues to create geopolitical and
energy-market uncertainty, and the next regularly scheduled federal general election is
November 3.
It’s easy to look at all of that and say:
“Maybe I’ll just wait until spring.”
But here’s the question we think buyers should ask instead:
What exactly are you waiting for?
Are you waiting for mortgage rates to fall?
Home prices to fall?
The election to be over?
Gas prices to come down?
The war to end?
Inflation to disappear?
The economy to give us an “all clear”?
Any of those things could happen.
They also might not.
And some could improve while others get worse.
The Perfect Market Rarely Exists
There is almost never a moment when every economic indicator tells you, “This is the perfect
time to buy.”
When rates are very low, competition can be fierce.
When the economy feels great, buyers often feel confident and prices can rise quickly.
When buyers become nervous, competition may decrease—but the headlines feel
uncomfortable.
Every market gives you something, and every market takes something away.
That’s why trying to perfectly time the housing market can be so frustrating.
Instead, we believe buyers should focus on what they can actually control.
Can you comfortably afford the monthly payment?
Do you have adequate savings after closing?
Does the home meet your needs?
Do you plan to stay long enough for homeownership to make sense?
Are you buying because it improves your life—not because somebody is pressuring you?
If the answers are yes, today's uncertainty doesn't automatically make buying a bad decision.
Your Life Doesn't Operate on the Federal Reserve's
Schedule
Families grow.
Jobs change.
People get married.
Children need another bedroom.
Parents move closer to family.
Rent increases.
Commutes become unbearable.
Sometimes you simply reach the point where you're ready for a place that belongs to you.
Those decisions don't always line up perfectly with interest-rate cycles, elections or economic
forecasts.
And that's okay.
A home isn't only a financial asset. It's where life happens.
Real Estate and Inflation
There is another reason to think long term.
Inflation gradually reduces the purchasing power of money. Real estate, while certainly not
immune to short-term market fluctuations, has historically provided meaningful long-term
protection against inflation. Recent peer-reviewed research examining multiple countries,
including the United States, found direct real estate to be an effective long-term inflation hedge.
And with a fixed-rate mortgage, your principal-and-interest payment doesn't rise simply because
inflation does.
That doesn't mean everyone should buy a house today.
It means fear alone shouldn't make the decision for you.
Turn Down the Noise
There will always be another headline.
Another Federal Reserve meeting.
Another election.
Another economic forecast.
Another reason someone on television thinks the housing market is about to boom—or collapse.
Your job isn't to predict all of it.
Your job is to understand your own finances, your own goals and the opportunities available to
you today.
Don't buy because you're afraid of missing out. And don't wait simply because you're
afraid.
If you're considering buying in Fountain Valley, Huntington Beach or anywhere in Orange
County, the Lily Campbell Team would be happy to sit down with you, look at the numbers and
help you decide whether buying now makes sense for you.
Sometimes the right answer will be “not yet.”
And sometimes you'll discover that the opportunity you've been waiting for is already here.
