Is now the best time to buy a new home, or is it better to wait for additional Federal Reserve rate cuts?<\/p>\n
Financial advisors are increasingly being faced with that question. And its not an easy one to answer.<\/p>\n
Even as markets anticipate eventual rate cuts from the Fed, existing home sales<\/a> appear headed for another sluggish year as high mortgage rates and limited inventory continue to weigh on affordability. This sticky situation has wealth management clients asking their advisors whether they should make a move new or wait for rates \u2013 and home prices \u2013 to come down further.<\/p>\n Existing home sales in the United States eased by 0.2% from the previous month to a seasonally-adjusted annualized rate of 4 million in August of 2025, according to the latest data from the Federal Reserve<\/a>. Sales for the period proved to be lower than the average for the year, while housing inventory fell 1.3% from the previous month to 1.53 million units, equivalent to 4.6 months of supply. At the same time, the median existing-home price rose by 2% annually.\u00a0September home sales will be released on October 23rd.<\/p>\n Brian Peardon, private\u00a0wealth advisor at BridgePort Financial Solutions, says his \u201cbase case\u201d is a\u00a0gradual Federal Reserve rate easing over the next year, with the caveat that mortgage rates probably likely will not plummet. In his view, it\u2019s likely that 30 year fixed mortgage rates\u00a0will shift\u00a0slightly\u00a0from their current perch around 6.5% today,\u00a0down toward perhaps the\u00a0low-6% to\u00a0mid-5% range, depending on inflation and global risk,\u00a0than a dramatic collapse.<\/p>\n \u201cIf inflation remains sticky, the Fed may pause cuts, pushing mortgage rates higher again. Rate cuts may provide breathing room, but they won\u2019t bring back housing demand unless they\u2019re substantial, combined with strengthening income growth,\u201d Peardon said.<\/p>\n Elsewhere, John Bish, investment executive at Stifel <\/a>Independent Advisors, expects the 10-year note to remain above 4% despite cuts in the fed funds rate due to sticky inflationary pressures.\u00a0As a result, he sees the impact of a fed funds cut on mortgage rates<\/a> to be muted and a continuation of the slow housing market through the rest of 2025 into the new year.\u00a0<\/p>\n \u201cNationwide home prices did not meaningfully increase in the last 12 months, and many markets are beginning to see a notable percentage of home sellers offer price cuts.\u00a0Additionally, homes in many markets are spending more time on the market with inventory continuing to climb,\u201d Bish said.\u00a0<\/p>\n On the more positive side, Brandon Goldstein, financial planner at Prudential Advisors, anticipates interest rates to be lower than today by this time next year leading mortgage rates lower from current averages.<\/p>\n \u201cIf mortgage rates do drop, it is possible that more potential buyers enter the market and that demand for homes will continue to drive housing prices up,\u201d Goldstein said.<\/p>\n HOUSE HUNTING IN A SLOW ECONOMY<\/p>\n While a rate cut could ease borrowing costs for homebuyers, it might also signal broader economic weakness. That means advisors will need to help clients navigate that trade-off as well. Both for their portfolios and their homebuying plans.<\/p>\n Prudential\u2019s Goldstein, for example, is helping clients by reviewing their budgets and financial plans to explore alternative options to buying today, such as continuing to rent.\u00a0<\/p>\n \u201cA rate cut might ease the cost of borrowing money; however, it also has the ability to drive up cost of homes. There has been much demand for housing over the last few years. When interest rates fall, more potential buyers will enter the market which will increase competition,\u201d Goldstein said.<\/p>\n BridgePort\u2019s Peardon, meanwhile, believes a rate cut is \u201cnot necessarily a red flag,\u201d because it may simply reflect prudent insurance against downside risks.<\/p>\n \u201cRunning portfolio stress tests, we look at\u00a0a client\u2019s\u00a0portfolios under both \u201csoft landing\u201d and \u201cmild recession\u201d environments to see how assets might respond.\u00a0 This helps set expectations for clients if the current environment changes,\u201d Peardon said.<\/p>\n \u00a0TO BUY OR NOT TO BUY\u00a0<\/p>\n For clients\u00a0who\u00a0are ready, with good credit, a down payment,\u00a0and a housing market that meets\u00a0their needs as well as\u00a0a long-term horizon, Peardon says he leans toward\u00a0buying now\u00a0with hedges\u00a0like\u00a0rate locks and refinancing optionality\u00a0for a mortgage.<\/p>\n \u201cFor more buyers just starting the journey to buy a home,\u00a0I might advise waiting cautiously while staying active in the market\u00a0by\u00a0watching inventory and continuing to build towards being buyer-ready,\u201d Peardon said.<\/p>\n Stifel\u2019s Bish believes that stable mortgage rates coupled with a weakening labor market should cause slowing growth in the U.S. housing market to continue into next year.\u00a0This could open up some housing opportunities depending on the client\u2019s location in his opinion.<\/p>\n \u201cFor some buyers, this may mean more affordable homes.\u00a0For buyers in other markets, homes may not be less expensive, but the price increases will likely decelerate,\u201d Bish said.<\/p>\n Bish adds that borrowers need to carefully manage liquidity on their personal balance sheets to weather unexpected expenses or volatility in cash flow from job loss or reduced income.<\/p>\n Finally, Goldstein says that if clients are in a situation where they would like to purchase a house in 2026, they need to know exactly how much will be needed for a down payment, as well as an emergency fund on top of the down payment.<\/p>\n \u201cWhile rate changes and housing prices will influence the amount needed for a down payment, it is important to plan ahead so that if an opportunity presents themselves for a home purchase, they are ready to move forward,\u201d Goldstein said.<\/p>\n","protected":false},"excerpt":{"rendered":"Is now the best time to buy a new home, or is it better to wait for additional…\n","protected":false},"author":2,"featured_media":62092,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[114,85,46,190],"class_list":["post-62091","post","type-post","status-publish","format-standard","has-post-thumbnail","category-markets","tag-business","tag-il","tag-israel","tag-markets"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/62091","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=62091"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/62091\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/62092"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=62091"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=62091"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=62091"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}