Should You Buy a Home Now or Wait in Montgomery, Alabama?

If you're trying to decide whether to buy a home now or wait in Montgomery, Alabama, a 23-year study from AD Mortgage found that buying now came out ahead 61% of the time. I'm Britt Dowling with Living in Montgomery Alabama, and buyers in Montgomery, Prattville, Pike Road, and Wetumpka ask me this all the time.

Nobody wants to buy and then watch rates or prices drop a year later. The study puts real numbers behind that worry, so they're worth a look before you put your plans on hold.

What Did the 23-Year Study Find About Buying Now vs. Waiting?

AD Mortgage looked at every state and every year from 2000 to 2022. For each one, they compared buying right away against waiting two years. Both paths used the same home price, a 15% down payment, and that year's average mortgage rate. The waiting path also counted two years of savings at 10% of household income. Whichever path cost less overall won.

Buying now won 61% of the time. It changed by state: 74% in California and Florida, the highest, and 39% in West Virginia, the lowest. In 2022, buying now won in every state.

Does Waiting for Lower Mortgage Rates Pay Off?

Sometimes, but not reliably. From 2000 to 2002, the average rate fell from 8.05% to 6.54%, and buying now won only 34% of the time. From 2013 to 2015, the rate barely moved, going from 3.98% to 3.85%, and buying in 2013 won 84% of the time.

A lower rate later doesn't cancel out what happens to home prices and your savings while you wait. I wrote more about that in my post on mortgage rates dropping.

Can Anyone Predict When Buying Now Will Win?

The winner flipped again and again over the 23 years:

• 2003 to 2005: buying now won 94% to 100% of the time
• 2007 to 2010: waiting won every year, during the housing crash
• 2015 to 2017: buying now won 92% to 100% of the time
• 2018: buying now won only 2%
• 2020 to 2022: buying now won 100% of the time

With results swinging that much, waiting for a clear signal mostly means guessing.

Is It Better to Buy Now or Wait in Montgomery, Alabama?

The study covers states, not Montgomery, and it compares purchase and financing costs only. It leaves out equity, home price growth, property taxes, insurance, and maintenance. I can't tell you where rates or prices will be in two years, and neither can anyone else.

What I can help you check is whether the numbers work today: your savings, your monthly budget, and how comfortable you feel with the payment. My budgeting post is a good place to start.

If they do work, reach out and I'll help you look at homes for sale in Montgomery and across the River Region.