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Buying a home now beat waiting in 61% of historical cases, study finds
The analysis of 2000 to 2022 data compared buying immediately with waiting two years, and it found buy-now produced lower total purchase and financing costs in 61% of scenarios.
HousingWire reports that an AD Mortgage study comparing buying now versus waiting two years across 50 states and the District of Columbia from 2000 to 2022 found that purchasing immediately was the better financial outcome in 61% of scenarios.
The study’s results varied by state and time period. Florida and California showed the strongest advantages for buying now, with a 74% buy-now edge in each state, while West Virginia had one of the weakest at 39%.
According to the study, buying immediately led to lower total purchase and financing costs in 61% of scenarios analyzed. It modeled monthly mortgage payments using the average annual 30-year fixed mortgage rate and assumed buyers put 15% down, while the wait scenario assumed buyers saved 10% of median annual household income during each of the two years.
AD Mortgage said the buy-now strategy was dominant in certain years, including 98% of scenarios in 2003, 100% in 2004, and 92% in 2015, while waiting led in 2007 through 2010, when the buy-now approach was not better in any scenario. The study used Zillow’s Home Value Index data for home prices and Federal Reserve Bank of St. Louis data for mortgage rates, alongside U.S. Census Bureau household income figures.