Am I missing out if I don't buy now?
The best time to buy depends on your personal circumstances.Trying to time the market for the best deal is something even professional investors aren’t very good at.
According to Zillow economists, the current environment poses both opportunities and challenges. The opportunities are not as obvious as the challenges, but they’re out there:
- Mortgage interest rates are very low, which has the potential to significantly boost your buying power.
- At this exact moment, with many people pulling back and staying home, there could be less competition for the still-limited pool of homes for sale.
- Sellers may be more flexible on pricing and/or timing in order to close a sale, especially if letting their home stay on the market will cost them or delay their own plans.
- If demand stays strong and the crisis passes relatively quickly — both big “ifs” at this moment — then we can probably expect price growth to accelerate like it was earlier this year. If that’s the case, it might be a good time for some buyers in some markets to get ahead of any growth in home prices.
Still, the challenges are daunting:
- Inventory is already low, and it’s unlikely that many would-be sellers will list their homes right now. That could make it harder for you to find the right home.
- Mortgage interest rates are low but volatile — and lenders are working through a flood of refinance applications. For would-be buyers who secured financing in early March, this may not be as big an issue. It’ll be a lot tougher if you have not yet started the mortgage process.
- It also may be difficult (or impossible) to complete the sale on time if some of the connected businesses, such as appraisals, inspections and title services, are temporarily closed due to public health orders.
- If the crisis persists and social-distancing and other behaviors last through the bulk of the year, home prices may fall somewhat in response to the lack of demand from buyers. It could make sense for some buyers to wait to see if the home they’re eyeing today is available at a lower price tomorrow.
If you have the time and willingness to face the current challenges, now could present some interesting opportunities. But you should have a plan to ensure you can back off and/or re-evaluate as the situation unfolds. If you’re risk-averse or don’t feel ready, you’re likely to be more comfortable waiting until the situation is more clear.