Timing the market: When is the right time to buy a home?

There’s been a lot of talk about the housing market over the past few years. The record-low interest rates of 2021 quickly soared close to 8 percent by 2023. Housing prices jumped to new highs while the number of available homes on the market plummeted. The good news is that housing inventory is climbing now and interest rates have been in a slow decline over the past two years, dropping to the low 6 percent range. But is that enough for would-be buyers to jump into the market? Or will they find themselves wishing they had waited?

“The first thing we tell buyers is don’t listen to the internet,” said Gerald “Jerry” Robinson, broker/CEO of 1^st Choice Mortgage Company in Meridian (NMLS 4475). “The right time to buy a home is really when you’re ready to buy a house.”

Robinson said the noise, along with common misconceptions about what you need to buy a home, often keep well-qualified buyers on the sidelines.

“I had a couple come in who had great jobs for five years and they had saved a bunch of money,” Robinson said. “I asked them, ‘Why didn’t you buy sooner?’ and the big thing was they didn’t know there was down payment assistance and that you don’t need 20 percent down.”

Education is a key piece to starting your journey into the homebuying experience. The Finally Home! homebuyer education program is the starting point for thousands of would-be buyers every year. Taking the course helps you to qualify for down payment and closing cost assistance. More importantly it teaches you the basics of homeownership and the home-buying process.

“You can’t just go from living rent-free and never having paid a bill to owning a home,” said Brock Lewis, director of single-family lending at Idaho Housing and Finance. “Finally Home! prepares you so when the pieces do come together for you, we can help you with your down payment.”

Besides being prepared, Lewis said to remember that Idaho Housing has a number of different programs for different kinds of buyers, no matter what the interest rate is. Idaho Housing is even bringing back its ‘Below Market Campaign’ this spring that offers potential buyers with lower incomes a chance to buy a home at a rate below the current market rate. Lewis and Robinson point out that home prices throughout Idaho have been rapidly climbing over the past decade, which means a home you like now will cost more to buy later. And while we’re probably not going to see rates in the 2 to 3 percent range again, Lewis says it’s important to remember that those rock-bottom rates brought different challenges for would-be homebuyers, including intense bidding wars.

“There were homes having 5, 10, 15 offers, so you’re having to pay max price or more than you planned and that’s going to offset what you would save in interest,” Lewis said. “If you’re buying at 7 percent and rates go down, you can always refinance, but you’re not having to compete with other borrowers.”

No matter when you decide to buy, Robinson said it’s important to remember that as your home equity grows, so does your wealth. Each mortgage payment also moves you closer to owning your home outright, as opposed to paying rent.

“You know, after 360 payments, you don’t have to make any more payments. That’s it. You can retire without a house payment,” Robinson said. “After 360 rent payments, you have another 360 rent payments.”