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Five Research-Backed Reasons Not to Delay Buying a Home (even in a Recession)

Buying a home during a recession might seem counterintuitive, but research and market trends show it can actually be a smart move. Waiting for the economy to “bounce back” might cost you more in the long run. In the context of the 2025 housing market, here are five research-backed reasons why delaying your home purchase could hurt your affordability and wealth-building potential.

1. Home Price Trends – Prices May Rise, Making Waiting Costly

Home prices are not guaranteed to drop in a recession. In fact, housing values often hold steady or even increase during economic downturns. Historically, in 4 of the last 6 U.S. recessions, home prices actually appreciated – they only fell significantly during the early 1990s (a mild dip) and the 2008 crash. For a detailed look at this trend, check out the infographic from Fidelity Home Group.

Current forecasts for 2025 reflect modest price growth, not decline. According to Business Insider, leading analysts predict home prices will continue rising by about 1.3% to 3.5% in 2025. Similarly, Redfin economists project a ~4% increase in median home prices in 2025 (Business Insider).

Even though the growth rate is slower than the post-pandemic boom, it’s still upward. Delaying could mean paying a higher price for the same house later. For example, a home priced at $300,000 today might cost around $309,000 (3% more) in a year, stretching your budget further. Financial advisor Dave Ramsey notes that home prices are likely to “go up” even if the market isn’t surging – he advises, “don’t sit around waiting on the market to ‘correct.’ Prices are going to go up” (NASDAQ).

2. Interest Rate Projections – Lock in Rates Now (Refinance Later if Needed)

Mortgage interest rates play a huge role in your monthly payment. During recessions, rates often fall as policymakers try to stimulate the economy. However, waiting for dramatically lower rates may not pay off.

Many forecasts suggest rates will not plummet in 2025, but instead stabilize at moderate levels. For instance, the Mortgage Bankers Association projects 30-year mortgage rates around the mid-6% range through 2025 (Ramsey Solutions).

Fannie Mae’s January 2025 outlook similarly puts the average 30-year rate at about 6.7% in early 2025, only edging down to ~6.5% by early 2026 (Kidder). In other words, we’re not headed back to the 3% rates of 2021 anytime soon.

If you delay your purchase hoping for a much lower rate, you might end up facing the same or even higher rates later, without having gained any ground. It’s also worth noting that if a recession does bring slightly lower mortgage rates, it can backfire by stoking housing demand – more buyers could rush in and bid up home prices as soon as rates dip.

That’s why many experts say it’s better to buy when you’re ready and refinance later if rates fall. As Dave Ramsey advises, “If you wait two years, prices are going to be more. And if you buy now at a higher rate and the rates come down, just refinance” (NASDAQ). Remember, while you can refinance later, you can’t lock in today’s price once it’s gone.

Even a small rise in rates can hurt affordability—a 1% increase can cut buyers’ purchasing power by roughly 10%. With so much uncertainty ahead, buying now protects you from that risk.

3. Cost of Renting vs. Buying – Hidden Costs of Renting

When deciding whether to buy now or wait, a key comparison is your cost of renting versus the cost of owning. In the short term, especially during a high-interest-rate period, renting can appear cheaper per month.

As of early 2025, renting is still the budget-friendly option in most areas: leasing the typical apartment is more affordable for median earners than buying a median-priced home in 48 of the 50 largest U.S. metros (Realtor.com). For example, the median U.S. rent (around $1,700 for a 0–2 bedroom unit) is hundreds of dollars less per month than the payment on a median-priced starter home in many cities (Realtor.com) and Investopedia.

However, those savings come at a cost: rent payments build no equity. Moreover, while rent prices dipped slightly in 2024, they’re starting to stabilize and could rise again. Nationally, median rents in January 2025 were about 0.2% lower than a year prior – a small relief – but they’re still 16% higher than they were in January 2020 (Realtor.com).

Industry forecasts predict that rents will resume climbing at a moderate pace. For example, CBRE Group projects that apartment rents will grow around 3.1% annually over the next five years (Loebsack Brownlee). If you continue renting, you may see your rent rise year after year – essentially paying more for nothing.

On the other hand, buying a home means locking in a fixed monthly cost with a fixed-rate mortgage, helping protect you from inflation. Although the average new homeowner’s mortgage payment is about 35% higher than renting an equivalent apartment (Loebsack Brownlee), much of that extra amount goes toward building your own equity.

In summary, while renting might feel cheaper month-to-month, you’re essentially paying your landlord instead of investing in your future.

4. Equity and Wealth Building – Homeownership Is a Key to Long-Term Wealth

Every month you delay buying is a month you delay building equity in a home. Think of equity as a forced savings plan – as you pay down your mortgage and your property appreciates, your ownership stake (and net worth) grows.

The data is striking: U.S. homeowners have a median net worth of about $396,000, while renters have a median net worth of only about $10,400 (Eye on Housing). That means the typical homeowner is nearly 38 times wealthier than the typical renter.

While not all of that difference is solely due to home equity, owning a home puts you on a wealth-building path that renting simply can’t match. Even in a slower market, U.S. homeowners saw a total gain of $1.1 trillion in home equity in the year leading up to Q3 2023—a 6.8% increase year-over-year (Eye on Housing).

In addition, tax advantages like mortgage interest and property tax deductions can further enhance the benefits of homeownership. The sooner you buy, the sooner you start compounding your wealth.

5. Market Inventory and Competition – Waiting Could Mean More Buyers Chasing Fewer Homes

During a recession, the housing market often cools down—fewer buyers are actively looking, and some sellers pause their listings. This creates a window of reduced competition for those ready to buy. However, if you wait until after the recession, you might face a surge of buyers.

Even a slight dip in mortgage rates can trigger pent-up demand. An analysis by OPB noted that lower rates could lead to higher home prices by luring more buyers into a limited market.

Additionally, many current homeowners are “locked in” to low mortgage rates – as of late 2024, an estimated 85% of mortgage-holding homeowners have rates under 6% (FNBO). This lock-in limits inventory, and while new construction is rising (with Realtor.com forecasting a 13.8% increase in single-family starts), much of it targets mid-to-upper price tiers.

Redfin even predicts that home sales will pick up next year, with existing home sales possibly reaching 4.1–4.4 million by the end of 2025 (Newsweek). In short, waiting could mean facing fiercer competition and a market where good deals are harder to find.

As one real estate agent put it, many buyers who waited “would have been in a whole different place” financially if they had bought during a quieter market (OPB). If you’re financially ready, acting now might save you from the rush later.

Sources & Additional Reading

If you have any questions about your homebuying journey or need help navigating the market, please contact us – we’re happy to help!

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