Home Buyers Are Pausing Their Plans for 6 to 12 Months. Should You Do the Same?

At this point, waiting may not be a bad idea.

Today's housing market is one of the toughest prospective buyers have ever dealt with. The reason? Real estate inventory is extremely low, and that puts sellers in a position to command sky-high prices for their homes. Plus, a lack of inventory means the limited properties that do hit the market are often subject to bidding wars, which can be extremely stressful for buyers.

Mortgage rates have been on the rise since the start of the year, compounding the issue. Not only have rates risen sharply, but recently, the average 30-year mortgage topped the 6% mark. Considering that the same loan product sat at around 3% at the start of the year, that's a huge jump.

The market has gotten so hard to navigate that in a recent HomeLight survey, 45% of real estate agents say their buyers are pausing their home searches for six to 12 months to wait things out. And that's a strategy you may want to consider.

The case for waiting

Right now, if you purchase a home, you effectively get the worst of all worlds. You pay a higher purchase price for a home, pay more to finance your home, and likely have to settle for a home that isn't close to perfect, because listings are in such short supply. Given all of that, it really doesn't pay to continue a home search unless you're truly desperate to move.

Let's say you're tired of renting but have a comfortable home, a responsive landlord, and a lease at a reasonable price. While it's understandable to be tired of renting and eager to buy a place of your own, that's a situation in which it's not unthinkable to stay put a while longer.

On the other hand, if your landlord recently raised your rent unreasonably and refuses to fix issues with your rental unit, then you may want to escape sooner. So rather than moving multiple times (and bearing the cost), it's easy to see why you'd want to forge ahead with a home search.

What's the right call?

Your current housing situation should play a role in determining whether it pays to move forward with house-hunting. But so should your finances.

If you've looked for a home for a while and struggled to find a decent place that fits your budget, that alone makes the case for waiting things out. Remember -- a big reason home prices are so elevated right now is that there's not nearly enough inventory to go around. But over the next six to 12 months, more inventory could hit the market, giving sellers less of an upper hand and forcing buyers into fewer bidding wars.

Granted, there's no guarantee the housing market will have a lot more options in six to 12 months. But real estate inventory has been slowly creeping upward. And if you wait things out, you may find that you have more opportunities at the end of 2022 or during the first half of 2023.