They say not to time the market. It’s a chump’s game. If anyone had any real success at it, they’d be rich.This type of advice typically applies to the stock market, but it can apply to just about anything else too.It’s hard enough to predict something to happen at any given time. And exponentially harder to predict something to happen in a short window of time.In other words, don’t bother. Don’t try to time it. It won’t go as expected.When it comes to home buying, the same holds true. But unlike investing, there are so many factors to consider beyond price.Now That Rates Are Lower, You No Longer Need to Beat the Rush?It’s funny how the media jumps onto certain narratives, runs with them, exhausts them, and then moves on to the next one.All while forgetting about (and essentially ignoring) the prior one in the process. It’s, for a lack of better words, old news.That piece of old news was the argument that it made sense to dive into a home purchase while mortgage rates and home prices were high, before the herd followed.Simply put, there’d be less competition if you purchased when no one else was, and you could snag a home before the others inevitably came after you and bid up the price.Despite paying a high price and getting an equally expensive mortgage rate, there was the promise of a lower rate in the near future thanks to a rate and term refinance.There was even a cute catchphrase floating around saying to marry the house, date the rate.In other words, lock down the property now, but finance it with a loan you only plan on keeping for a year or two before rates get much cheaper. That brings me to a new piece of advice floating around housing news circles; that you might want to wait a little bit longer.‘You Might Not Want to Purchase a Home Just Yet’Gone is the beat the crowd to buy a house advice. It may have made sense at the time, logically speaking.When mortgage rates nearly tripled from sub-3% levels to around 8%, demand plummeted.Aside from turning off a lot of prospective buyers, it simply made a home purchase unaffordable for most.If you still had the means to take the plunge, it could have meant less (or no) competition and possibly an accepted bid below asking.However, this mentality was still based on timing the market. Were you buying a home because you wanted to, or simply to beat the “rush?”And would that rush ever actually materialize? Or were you catching a falling knife and getting stuck with a high mortgage rate in the process?Well, now that we have the benefit of hindsight, we know that mortgage rates didn’t come down quickly, nor have they come down as much as expected.Yes, they’re lower, but not where many expected them to be by now. At the same time, home prices have continued to increase, at least nationally.Some pockets of the country have seen prices drift off their all-time highs as supply has ticked up.But perhaps most importantly, there has been no rush. There wasn’t a major uptick in demand, as seen in the chart above, when mortgage rates began to fall. And there still hasn’t been.In fact, the Mortgage Bankers Association (MBA) pointed out that mortgage rates have fallen for four consecutive weeks, yet purchase applications haven’t moved much higher.MBA Vice President and Deputy Chief Economist Joel Kan said, “Prospective homebuyers are staying patient now that rates are moving lower and for-sale inventory has started to increase.”Huh? They were told to rush to buy when rates were high and now they’re not buying when rates are nearly 1% lower than a year ago? And are instead being told to wait?How Did We Not See This Coming?In retrospect, it seems entirely obvious that once mortgage rates began drifting lower with any conviction, prospective home buyers would wait for even better.It’s predictable human psychology. If you think something is going to get cheaper, why jump in now?Would you book an airline ticket or a hotel room today if you expect the price to come down next week or next month?Why not just wait for things to actually get better? Well, that was the advice being dished out last year, that you needed to beat the herd.Get in before the home buying frenzy returns. But it doesn’t appear that many are heeding that advice anymore. Or if they ever did to begin with.And that might speak to greater issues in the housing market. For one, affordability remains very restrictive, with prices and rates still quite elevated.There’s also the notion that the housing market isn’t as sound as once thought, especially if we’re on the brink of another recession.While it’s far and away better than the one that preceded it in the early 2000s, the wider economy can still wreak havoc.If unemployment continues to rise, it won’t matter if mortgage rates drift even lower from here.You could wind up in a situation where you have fewer eligible buyers, counteracting the benefit of a cheaper mortgage payment.This is something many don’t tend to grasp or anticipate.As I’ve said many times, home prices and mortgage rates aren’t negatively correlated. Their relationship isn’t well defined. One doesn’t go up as the other goes down.Remember, weak economic data tends to lead to lower mortgage rates as bonds become a safe haven for investors and their demand increases. Bond prices go up and their yields (interest rates) go down.So it’s entirely possible (and logical) for mortgage rates and home prices to fall together, even if lower payments would seemingly increase demand.It’s Not About Mortgage Rates Anymore…Ultimately, the housing market story is no longer about mortgage rates. It was a year ago, but it’s not today. And that’s what makes it difficult to jump on these narratives.The second you think you’ve got it figured out, things completely shift, often in an unexpected manner.Just look at the pandemic. We thought the housing market had topped back in 2019 or earlier. Then COVID came along and home prices rose another 50%.Who saw that coming? And who predicted that mortgage rates would surge to 8% in less than two years?So stop buying into strategies that attempt to time the market. You’ll just wind up disappointed.If you want to buy a home, buy a home that you love, want/need, and are able to qualify for now and in the future.Don’t go out and rush to buy a home at a certain time because an article says it’s a good idea.Keep Reading: 10 Reasons to Buy a House Other Than for the Investment Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 18 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on Twitter for hot takes.Latest posts by Colin Robertson (see all)
