Should You Buy a Home in Metro Phoenix Now or Wait for Rates to Drop?

There are a few loud resounding messages that we commonly hear from our first-time home buyers: 1) “Rates are too high right now. We’re just going to wait until they drop.”; 2) “Everyone is saying to be patient… the prices will crash.”; and 3) “I don’t have 20% to put down, so I can’t do anything.”  Meanwhile, for many, rents remain uncomfortably high; they’re tired of feeling stuck, and life marches on along with time. As your trusted guides for life’s biggest moves, we want to demystify the headlines and soundbites while helping you to clearly and confidently decide what makes sense for you.  

There’s no denying that rates matter; however, they’re not the only variable that we need to take into consideration. When rates drop, demand typically surges. A surge in demand increases competition. As competition increases, prices rise. This is the pattern we have seen repeatedly in Metro Phoenix. Whenever rates dip slightly, buyers flood the market. Sellers regain leverage. Multiple offers return. Waiting can help, but it can also cost you more if home values climb while you wait. If you buy now and rates drop later, you can refinance. Conversely, if you wait and prices climb, you can’t go back and buy at today’s price. That doesn’t mean buying now is automatically better, but it is a factor most tend to overlook. 

What about those who are waiting for the prices to crash? Yes, prices can adjust, and we may see small corrections in some areas, but the 2008-style collapse requires very different conditions than those which exist today. Some of the triggers for collapse in our current market would include massive oversupply, widespread foreclosures, and a severe rise in job loss. Currently, we’re not seeing any of that in our area. What we are seeing is that Inventory remains relatively controlled, most homeowners are locked into low rates and are not forced to sell, and population growth continues. 

Regarding those who have themselves in a holding pattern until the 20% downpayment war chest is accumulated, there are alternative paths. There are FHA options, Conventional 3% down programs, various down payment assistance programs, and seller concessions that can reduce upfront costs. As your trusted real estate agents, we connect you with vetted lenders who provide you with sound advice to help you understand your real numbers, not the internet numbers. Armed with actual numbers, you can shift your thinking from asking, “Is the market read?” to “Am I ready?”.  

Certainly, there are times when you just might not be ready yet. Readiness is directly linked to financial stability, and buying before you are financially stable creates undue stress, i.e., stretching finances beyond your means or an uncertain job situation. Waiting might also be the right move if you do not plan on staying in the house for at least 3-5 years or if you are buying purely out of fear of missing out or some other self-imposed pressure. Pressure cannot override properly informed decisions which consider your financial stability, if the payment works for your life, and if the purchase aligns with your long-term goals.  

Attempting to time the market perfectly is almost impossible. Our goal is to assist you in building long-term equity through smart, stable ownership. After conversing with you and analyzing your situation, we can certainly help by formulating a strategy which considers reality while providing you with clarity, because the right move is not about headlines; it is about your life.