Timing The Market Fails

Sellers were cutting deals for buyers that we had not seen in years, and I thought the table was set for mortgage rates to finally come down. That was my take in early May 2025.

Start with seller concessions. Redfin had just reported that about 44% of home sales in the first quarter of 2025 included a seller concession, meaning the seller pays closing costs or gives some kind of credit or incentive to get the buyer to buy. A few years earlier in most of the country you were competing against other offers. That was not the case anymore. A Zillow article said that in 242 markets, home prices were expected to decline that year. I live in California, and that is not what we are seeing. Markets like Sacramento and the Bay Area were still tight, and sellers there were getting top dollar. But in places like Texas that had an explosion of inventory and new construction, the story was different. Overall, inventory was on the rise across the country, and buyers were getting a better deal than they had in years.

The question I get every day is what interest rates will do. Honestly, nobody has the answer. But as I filmed this in May, I thought the table was set for rates to come down. Mortgage rates are tied to the 10-year Treasury, and the 10-year moves mostly on inflation and the economy. In the last week of April and first week of May, the PCE report, which is core inflation, showed inflation coming down. And first-quarter GDP did not grow the way most economists predicted. When people tied to restaurants, tourism and small business tell you they are cutting back, that tells you something. So there were two stories. Over the next year, most economists expected rates to slowly come down. In the short term, the trade war with China could be a black swan event and could temporarily push inflation up, which would not be good for rates. I told people to expect volatility through May.

Now, what does that mean if you want to buy in the summer? A lot of today's buyers are move-up buyers who have a home to sell. If you are waiting for a better price on the next house, remember that whatever discount you hope to get is the same discount you will give the person buying yours. Trying to time the market when you have a home to sell does not work. Just buy when the time is right for you.

For first-time buyers, I understand waiting for a more affordable time. But remember this. When mortgage rates come down, more buyers enter the market, and more demand tends to push prices up. So be careful if you plan to time it. Starting about three years before, rates went from around 3% to over 7%. I talked to a lot of people who decided to wait for rates or prices to come down. Three years later, rates are still high and prices are higher in many places. Timing the market does not work. If you are ready, responsible and in a good position, buy when it is right for you.

If you want to talk it through, look at refinance planning for after you buy, or get your rate. MortgageOne is now licensed in 49 states.