Whether you’re a renter who’s dreaming of becoming a homeowner or a homeowner who’s dreaming of your forever place: Answering two questions can help you determine if it makes more sense to buy now or wait.

Ask:

1. Where will home prices be in a year?
2. Where will mortgage rates be in a year?

Over the next year, home prices are expected to continue to appreciate. While prices may not surge as rapidly as they did a few years ago, home values aren’t likely to depreciate. CoreLogic currently predicts a 4.5-percent year-over-year increase in home prices.*

As for mortgage rates, where they head this year hinges on whether the Federal Reserve can keep a handle on inflation. When inflation declines, mortgage rates typically follow suit. While no one knows exactly what mortgage rates will do, some housing authorities suggest they’ve hit their peak.

“Steady progress on taming inflation means that while mortgage rates will probably stay elevated for at least a few months, they’re likely to start coming down before the end of the year. That should encourage some sellers and buyers to jump into the market,” Chen Zhao, Redfin Economic Research Lead, says.

Should you buy now or wait?

Contact your local Academy Loan Officer for a cost of waiting analysis.

It’s possible that taking a “wait and see” approach in today’s market could come with higher prices. Home prices are set to rise, and affordability will depend on how much mortgage rates decline.

Putting it in perspective, a typically priced home at around $350,000 may cost over $365,000 in a year’s time.

This price increase also represents the potential equity you could gain. A $350,000 home purchased today is expected to earn as much as $15,750 in home equity in the next year.* Becoming a homeowner and building prosperity can set you up for the future. Homeownership has been named the greatest wealth source among families. A typical homeowner could accrue up to $240,200 by living in their home for just 10 years.

In contrast, rents are still rising. Last year, U.S. rents hit multiple record highs.

“Homeowners benefit from wealth accumulation from house price appreciation over time and the equity gains generated by monthly mortgage payments, which become a form of forced savings for homeowners,” Ksenia Potapov, First American Economist, explains.

So, should you buy now or wait? Even with these benefits, there are still reasons why buying now may not be the right move. You may be saving up for a down payment. Or perhaps you’re working on your credit so you can qualify for a better rate. Whatever the case may be, reaching out to a local Loan Officer can help you understand your options.