Yes, Virginia, there is a buyer’s market

Dear Realtor: I am 28 years old. Some of my friends who rent say that there is no such thing as a buyer’s market, that it is not a good time to buy a house, and that I should give up. Papa says, “If Larkowski says it’s a good time, it’s so.” Please tell me the truth, is it a good time to buy a house?

Virginia, your friends who rent are wrong. In this country of ours, for decades it has been an adult’s dream, called The American Dream, to own one’s own home.

Recent technology has made available plenty of information, analysis, and advice.

However, one critical component of success and happiness that should come from inside of us, and nowhere else, certainly not the internet, is emotion. Emotion inspires, emotion drives, and emotion sustains. As long as emotion is governed by rational thinking and judgement, emotion is jet fuel for goals and ambitions. So it is ok to dream.

Yes, Virginia, there is a buyer’s market. It exists no matter what the interest rates are, and no matter what the definition is for a seller’s market and a buyer’s market.

A buyer’s market is often defined as when the supply of houses is six months or more. In Pulaski County, halfway through 2026, the supply is 5.3. Technically just shy. I have said for years, “There’s never a bad time to buy or sell a house.”

Landlords won’t lease to you unless the rent they charge is 30% of your monthly income, plus or minus five percent, depending on the landlord. Banks will lend you money for a home mortgage in roughly the same range. The monthly outlay will be very similar, renting or buying.

When you rent, the interest rates remain, effectively, 100% for renters. You are building no equity for yourself, just for your landlord. The landlords either have a monthly mortgage on the property that YOU help pay for monthly, or the property is paid for, and the landlords are paying themselves back with YOUR money. Either way you look at it, you are already buying a home, just not for yourself.

As for waiting for rates to drop, in June 2024, the interest rates averaged 6.87%. This month, they were 6.49%. Where’s the drop?!?

Here’s where the internet can help. I asked AI to run an analysis on the interest saved in those two years, compared to home appreciation and a paydown of equity on a $200,000 loan over 30 years. Renters are losing $4,300/yr in building wealth. One should not have waited to buy; one should have bought and then waited.

Before closing arrives, inspections, seller-made repairs, bank appraisals, and warranties provide plenty of guard rails for buying a home that one might worry would become a “money pit”. Hiring the right people to look out for a home’s issues goes a long way towards eliminating the risk.

Your friends who rent will say they don’t have to worry about unexpected repairs. Not all landlords hop on those repair requests with the speed that a tenant would like. When you own, you have more control. As for the cost, assume the landlord will pass that cost onto you in future rent costs.

This raises the strongest reason to buy rather than rent. Ask your landlord to change the lease so that your rent stays the same for the next 30 years. (Ha!) While taxes and insurance may go up, it does for landlords also, one of the reasons rent goes up. You will face that your entire life, renting or owning. A home mortgage’s principal and interest amount, however, stays the same for the entire term of the loan.

That 5.3 percent supply of homes mentioned above in recent years is double what it was just a couple years ago. Buyers can be choosy. This improves your game plan. Several years ago, buyers were competing often against at least four to five other buyers. Today there are more sellers.

Sellers of high-end homes rely on demand from the owners of mid-range priced homes to buy theirs. Those mid-range homeowners need the last generation of first-time homebuyers to buy theirs. As you might have anticipated the next domino, they rely on today’s first-time homebuyers to buy their homes.

Congress just passed a housing bill designed to support homebuyers; it was one of the strongest showings of bipartisanship in recent memory. Now you know why. We are waiting on you. The federal government intends to help.

Not a good time to buy?!?! Luckily it is always a good time to buy. A thousand years from now, Virginia, it will be a good time to buy. So yes, Virginia, there is a buyer’s market.

Editor’s note: Jerry Larkowski is the managing broker for the Little Rock office of ESQ. Realty Group, LLC. The opinions expressed are those of the author.