The right time to buy a home anywhere in D.C., Maryland or Northern Virginia is when a buyer's life calls for it, not when the market or mortgage rates appear to signal it. Because neither can be predicted reliably, buyers who plan around their own needs tend to make sounder decisions than those waiting for a perfect moment that may never arrive.
Daryl Judy, an Associate Broker with Washington Fine Properties, gives buyers the same answer whenever they ask about timing. "The right time's when you're ready," he says.
Is now a good time to buy a home in the Washington, D.C. region?
In Judy's view, it is always a good time to buy if a buyer's circumstances call for it. A household that needs more space, wants to downsize or is relocating for a job has a real reason to move, and that need matters more than any market forecast. He compares a home to a long-term stock holding: the longer an owner keeps it and pays down the mortgage, the more likely it is to build value over time.
Can anyone time the real estate market?
No one can consistently time the real estate market, because too many outside factors shape it at once. Judy points to the early months of the COVID-19 pandemic, when activity in the region briefly came to a standstill before demand surged so quickly that homes drew offers far above their asking prices.
On one roughly $3 million home, he recalls making an offer $1 million over the asking price and still losing to a higher bid. "There's no way that you can time all the factors that influence the stock market or the housing market," he says.
Where are mortgage rates likely to head over the next year?
Judy expects mortgage rates to stay near current levels and possibly rise, though he is careful to say he is not an economist. His view is shaped by the industry experts, economists and fellow top agents he follows, and he does not expect conditions to change significantly over the next two years. "I could be totally wrong," he says, which is exactly why he advises buyers not to plan a purchase around a rate forecast.
Today's mortgage rates in historical context
Rates in the 6 to 7 percent range are historically normal, even if they do not feel that way to many buyers. Judy notes that younger buyers often think of 2 to 3 percent as the norm because those rates lasted so long, while buyers who have owned homes for decades remember 6 to 7 percent as typical and rates well into double digits before that. Seeing today's rates in that longer context can make the decision to buy feel far less daunting.
What does waiting for lower rates cost a buyer?
Waiting for lower rates can cost a buyer both time and money. On the personal side, it can mean staying in a home a family has outgrown, delaying a move to a preferred school or simply putting life on hold. "Waiting for lower rates costs a buyer the ability to move on with their life," Judy says.
On the financial side, a drop in rates tends to bring many waiting buyers into the market at once, increasing competition and pushing prices up. Judy illustrates the point with a hypothetical $1 million home: if rates fell by a point, renewed competition could push that same home's price up by well over $100,000, offsetting much of the benefit of the lower rate.
The mortgage rate lock-in effect
The lock-in effect describes homeowners who stay in place because they secured a much lower rate in recent years. An owner with a rate below 3 percent may be reluctant to sell and take on a new loan at around 7 percent, which helps explain why fewer homes are coming to market. At the same time, Judy notes that many people who bought between 2018 and 2021 have seen substantial appreciation and now hold more equity in their homes than they have in a long time.
Options if rates fall after a purchase
Buyers have more options than they once did if rates fall after a purchase. Refinancing remains available, though it can carry significant costs, and many lenders now offer their own programs, sometimes called a recast or rate adjustment, that let a borrower move to a lower rate with less expense. Judy advises buyers to raise the question before choosing a lender, asking what the lender offers if rates fall in the year after closing, because every institution handles it differently.
Deciding when to buy
Buyers should decide when to buy based on their needs, their budget and their long-term plans rather than on predictions about the market or rates. For Judy, the guidance comes back to a single principle: "You cannot time the market."
About Daryl Judy: Daryl Judy is an Associate Broker with Washington Fine Properties, specializing in luxury residential real estate across Washington, DC, McLean, Arlington, Alexandria, Chevy Chase, and Bethesda. He is consistently ranked among the top individual agents in the DC market by volume.
This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.
