Summary

“Should we buy now, or should we wait?”

In the Philadelphia suburbs, this question has become the single biggest mental roadblock for buyers in 2026. Mortgage rates are higher than they were a few years ago. Headlines keep promising that prices might soften. Friends and family insist waiting is “safer.”

But real estate decisions aren’t won by headlines — they’re won by math, opportunity cost, and time in the market.

This article walks through a realistic five-year financial comparison of buying now versus waiting, using assumptions that reflect how the Main Line, Chester County, and Bucks County actually behave — not how national markets make headlines.

Table of Contents

1. Why This Question Is Being Asked More Than Ever

2. The Assumptions Behind the 5-Year Model

3. Scenario A: Buying Now in 2026

4. Scenario B: Waiting 2 Years, Then Buying

5. The Hidden Cost of Renting While Waiting

6. What Happens When Rates Eventually Drop

7. Risk Analysis: What Could Go Wrong in Either Scenario

8. Who Should Buy Now — and Who Should Wait

9. The Strategic Takeaway

1. Why This Question Is Being Asked More Than Ever

In past cycles, the “wait or buy” decision was often obvious. Either prices were clearly overheating, or rates were clearly favorable.

In 2026, the market is more complicated:

• Prices have mostly stabilized rather than collapsed

• Inventory remains constrained in top school districts

• Mortgage rates are high — but not historically extreme

• Buyer competition is lower than it was in 2021–2022

That combination creates uncertainty — and uncertainty causes paralysis.

The mistake buyers make is treating this as a timing problem. It’s not.
It’s a cash flow and equity accumulation problem.

2. The Assumptions Behind the 5-Year Model

To keep this realistic, let’s use conservative assumptions that reflect Philly-suburbs norms:

• Purchase price today: $800,000

• Down payment: 20%

• Mortgage rate today: 7%

• Annual home appreciation: 3% (long-term suburban average)

• Annual rent inflation: 3–4%

• Investment return on saved cash (after tax): 4–5%

These are not best-case assumptions. They’re middle-of-the-road.

3. Scenario A: Buying Now in 2026

Purchase price: $800,000
Down payment: $160,000
Mortgage: $640,000 at ~7%

Over the next five years, here’s what typically happens:

Equity Build-Up

• You pay down principal each month

• Modest appreciation compounds annually

• Even conservative appreciation adds meaningful value

At 3% appreciation, that $800,000 home becomes roughly $927,000 in five years.

Add in principal reduction, and total equity growth can easily exceed $200,000 over that period.

Monthly Cost Reality

Yes — your monthly payment is higher than it would have been in 2021. But:

• Your payment is fixed

• Rent is not

• Taxes and insurance rise in both scenarios

Owning converts housing from an unpredictable expense into a controlled one.

4. Scenario B: Waiting 2 Years, Then Buying

Now let’s assume you wait two years.

During that time:

• You rent

• You save

• You hope for either lower prices or lower rates

What Usually Happens Instead

Prices

In the Philly suburbs, especially in top school districts, prices rarely fall meaningfully. They tend to:

• Flatten

• Drift slightly

• Then resume rising

At even 2–3% annual appreciation, that same home could cost $850,000–$875,000 two years later.

Rates

If rates drop:

• Buyer demand surges

• Competition returns

• Prices rise faster

Lower rates don’t make homes cheaper — they make them more competitive.

5. The Hidden Cost of Renting While Waiting

Rent is the most overlooked cost in the “wait” strategy.

Let’s assume:

• Rent: $3,500/month

• Annual increases: 3–4%

Over two years, you spend $85,000+ on rent.

That money:

• Does not build equity

• Does not hedge against inflation

• Does not lock in housing costs

Even if you save aggressively while renting, the rent itself is a real, irreversible cost.

6. What Happens When Rates Eventually Drop

This is where buying now quietly wins.

If you buy now:

• You can refinance later

• You keep your purchase price

• You benefit from appreciation

If you wait for rates to drop:

• You compete with sidelined buyers

• You likely pay a higher price

• You lose negotiation leverage

You can refinance a rate.
You can’t refinance a purchase price.

That asymmetry is the core advantage of buying in a higher-rate, lower-competition environment.

7. Risk Analysis: What Could Go Wrong in Either Scenario

Risks of Buying Now

• Short-term price stagnation

• Higher monthly payments initially

• Maintenance and ownership costs

These risks matter most if:

• You plan to move within 2–3 years

• Your job stability is uncertain

Risks of Waiting

• Prices continue rising

• Rates don’t fall meaningfully

• Competition returns suddenly

• You lose buying power relative to the market

Historically, in supply-constrained suburban markets, waiting carries more long-term risk than buying.

8. Who Should Buy Now — and Who Should Wait

Buying Now Makes Sense If:

• You plan to stay 5+ years

• You’re buying in a strong school district

• You can comfortably afford today’s payment

• You value stability and equity growth

Waiting Makes Sense If:

• You may relocate soon

• Your income is uncertain

• Buying now would stretch you too thin

• You need flexibility more than equity

This is not about courage or fear.
It’s about alignment with your life horizon.

9. The Strategic Takeaway

The question isn’t “Will prices dip?”
The question is:

“Where will I be financially in five years under each decision?”

In the Philadelphia suburbs, the math overwhelmingly favors:

• Time in the market

• Equity accumulation

• Refinancing optionality

For most long-term buyers, buying now — even at higher rates — produces a stronger financial outcome than waiting for a perfect moment that rarely arrives.

Final Thought

Markets reward prepared buyers, not perfectly timed ones.

If you’re buying a home to live in — not to flip — the most expensive mistake is often doing nothing.

By Eric Kelley, Philadelphia Suburbs Realtor & Attorney