When you buy a home, you’re not just securing a place to live—you’re making an investment. Over time, as home prices appreciate, so does your wealth. Bankrate explains it best:
“No matter which way the real estate market is leaning, buying now means you can start building equity immediately.”
Think of equity as the portion of your home you actually own—its value minus what you owe on your mortgage. As home values rise and you pay down your loan, your equity grows. And here’s the kicker: historically, home prices tend to increase over time, even if there are dips along the way.
Let’s look at an example. Say you buy a $400,000 home in early 2025. Based on expert forecasts from Fannie Mae’s Home Price Expectations Survey (HPES), home prices are expected to continue rising steadily over the next five years. By 2030, you could gain over $83,000 in household wealth simply through appreciation.
Now imagine staying in a rental for the same five years. Instead of investing in your future, you’re essentially paying your landlord’s mortgage and missing out on the opportunity to grow your own wealth.
The Cost of Waiting
It’s natural to think, What if prices drop? What if interest rates go down? While it’s tempting to wait for the “perfect” conditions, doing so comes with risks. Here’s why:
Home Prices Are Likely to Keep Rising
While the market may cool compared to the rapid appreciation of recent years, experts predict steady price growth through at least 2029. Waiting could mean paying more for the same home a year or two down the road.
Interest Rates Are Unpredictable
While rates could decline, they could just as easily rise. Even a small increase in rates can significantly impact your monthly mortgage payment and overall affordability.
Lost Equity Opportunity
Every month you delay buying is another month you miss out on building equity. If you wait, that $83,000 in potential wealth over the next five years could slip out of reach.
Renting Doesn’t Build Wealth
Renting might seem like the safer option for now, but it’s a short-term solution. The money you spend on rent provides no return, unlike mortgage payments that contribute to home equity.
Making the Numbers Work
If affordability feels like the biggest roadblock, there are creative ways to make homeownership achievable:
- Explore More Affordable Areas: Expanding your search radius can reveal hidden gems that fit your budget.
- Consider Different Property Types: Condos or townhomes are often more affordable than single-family homes and come with lower maintenance responsibilities.
- Look Into Assistance Programs: Many first-time buyers qualify for down payment assistance or special loan programs that reduce upfront costs.
- Partner with a Local Expert: A real estate agent can help you navigate the market, identify opportunities, and negotiate the best deal for your needs.
Why Time in the Market Matters
The longer you wait to buy, the more you risk missing out on the compounding benefits of homeownership. Buying sooner doesn’t just allow you to build equity—it also helps you establish stability, create a space to call your own, and achieve the dream of financial independence.
Remember, the goal isn’t to predict the market perfectly but to create long-term value for yourself. As the saying goes, “Don’t wait to buy real estate—buy real estate and wait.”
Bottom Line
If you’re on the fence about buying a home in 2025, consider the big picture. Time in the market matters far more than trying to perfectly time your purchase. Every year you wait is another year of missed opportunities to build wealth, grow equity, and create the home you’ve always envisioned.
Connect with a trusted real estate agent today to explore your options. With the right guidance, you’ll be ready to take that next step toward achieving your homeownership goals.