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This post has been updated and republished with the latest housing market data and strategic buying advice for 2025.
Read the latest version here:
Smart Money 101: Should You Buy a Home in 2025 or Wait for Prices to Drop?

Why Waiting to Buy a Home in 2025 Could Cost You Big – The Truth About the Housing Market

32. Housing Prices Are Rising Fast in 2025 – Should You Buy Now or Wait?

Let’s get real about this.

The economy right now? A total circus. Rent is absurd, groceries cost more than a car payment, and buying a decent coffee requires financial planning. Meanwhile, the housing market is playing hard to get, with mortgage rates creeping past 7% and home prices climbing like they just got a promotion.

So if you’ve been asking yourself, “Should I buy a house now or hold off and wait for prices to drop?”—you’re not alone. But here’s what most people don’t realize:

Waiting could cost you more.

Let’s break this down in a way that actually makes sense.

Why Are Home Prices Still Rising?

If you’re looking at home prices and thinking, “Who in their right mind is buying at these numbers?”—trust me, you’re not crazy. But the reality is, there are solid reasons why the market isn’t slowing down.

1. Building a House? Get Ready to Pay Up.

Ever thought about building your dream home instead? Spoiler alert: It’s even more expensive. Labor shortages and rising wages are making construction costs insane.

Roughly 20% of U.S. construction workers are immigrants, and thanks to stricter immigration policies, there just aren’t enough workers. Less labor = fewer homes = higher prices.

I remember venting to a friend in construction about the ridiculous housing prices. His response? “Dude, try building one. That’s even worse.” That was my wake-up call—waiting for prices to drop was wishful thinking.

2. Materials Are Ridiculously Expensive

Remember basic supply and demand? Well, it’s working against homebuyers right now. Lumber, concrete, and steel are all way more expensive than they were a few years ago.

I planned a simple home renovation a while back, but when I saw the price of lumber, I seriously considered learning how to cut down my own trees. Looking back, I should’ve stocked up on wood like it was Bitcoin in 2010.

3. Inflation Is Keeping Home Prices High

According to the New York Times, U.S. real estate prices have jumped nearly 20% over the past few years. That’s almost identical to inflation, which has gone up 17.84%.

When I bought my house, I expected prices to go up eventually. But I wasn’t prepared for literally everything else—gas, groceries, my Netflix subscription—to skyrocket too.

So even if home prices feel high, they’re actually keeping up with inflation. The longer you wait, the more expensive everything gets.

4. There Just Aren’t Enough Homes

Housing inventory is dangerously low. Builders can’t keep up with demand, and with fewer homes being built, prices keep rising.

A friend of mine recently tried to buy a home but kept getting outbid. He finally threw in the towel and said, “At these prices, I might as well just build one myself.” Honestly? Not a terrible idea—if you have unlimited patience and a construction crew ready to go.

Why Aren’t More People Buying Right Now?

One word: Interest rates.

Right now, mortgage rates are hovering around 7%. That’s a tough pill to swallow when people were locking in 2-3% loans just a few years ago. Many homeowners are staying put because selling means taking on a higher mortgage payment. That’s why the number of homes on the market is ridiculously low.

I was lucky enough to buy when rates were low. My loan officer literally told me, “You won’t see rates like this again.” At the time, I thought he was just trying to make a sale. Turns out, he was absolutely right.

Now, here’s where things get interesting.

If a Trump recession happens and the Federal Reserve lowers interest rates, guess what? Every single buyer waiting on the sidelines will rush back into the market. And when that happens? Home prices will explode.

So, Should You Buy a House Now?

I get it—buying a house is terrifying. But here’s the thing:

Home prices aren’t dropping anytime soon. If anything, they’re going up.

If interest rates drop, demand will skyrocket—and prices will climb even higher.

You can refinance a high mortgage rate later, but you can’t go back in time and buy at today’s prices.

A lot of people think, “I’ll just wait until the market cools off.” But historically? That’s not how this works.

The people who said that in 2020? They’re now paying thousands more for the same house in 2024.

Your Move: What’s Next?

So, what’s your plan?

Are you going to buy now and lock in a price before the market gets even crazier?

Or are you going to wait and risk paying way more later?

If you wait, sure—mortgage rates might drop. But when they do, everyone else will be rushing to buy, too. More competition = bidding wars = higher prices.

If you buy now, you secure today’s price. And if rates drop later? You refinance. Simple.

Here’s something to think about:

I’m not saying you should panic-buy a house tomorrow. But I am saying that waiting for the perfect moment is like waiting for Bitcoin to hit $100 again—it’s not happening.

The difference between homeowners and renters?

Homeowners build wealth. Renters keep paying someone else’s mortgage.

So, here’s the real question:

Do you want to own a home, or do you want to keep waiting—only to watch prices climb even higher?

Final Thought:

No one can time the market perfectly. But history shows us that home prices keep going up. If you have the means to buy now, it’s better to get in before the next wave of buyers floods the market.

Because let’s be honest—do you really want to be competing in bidding wars again?