Part 3: A Sideways Market — Is Waiting Really the Best Move?
A sideways market is one where prices move little in either direction. Sales slow, homes take longer to sell, and both buyers and sellers feel tempted to wait for something better. That’s where we’re likely headed in spring 2027. But waiting has its own costs, and it often isn’t the best move for either side.
For buyers: this may be your window.
A sideways market gives buyers things they haven’t had in years: more homes to choose from, more time to decide, and more room to negotiate. Price reductions, seller-paid closing costs, and inspection contingencies are back on the table.
The main reason buyers wait is interest rates. But there’s an old saying in the business: marry the house, date the rate. If you buy now and rates come down later, you can refinance into a lower rate. You can’t go back and renegotiate the price if rates rise.
Here’s a simple example. On a $640,000 loan, the monthly principal-and-interest payment is about $4,431 at 7.4%. At 6.4%, it drops to about $4,003, saving roughly $430 a month. A buyer who purchases now could capture those savings later through a refinance, after paying the refinancing costs.
The buyer who waits for 6.4% may face a different problem. When rates fall, the reserve army of buyers comes back, and competition pushes prices up. If the same home costs 3% more by then, the loan grows to about $659,000, and the payment at 6.4% is about $4,123. The waiting buyer pays more for the house and may face bidding wars again.
The catch: rates have actually to come down
The refinance strategy assumes rates won’t stay high for years. History offers some comfort. The last time mortgage rates rose above 7.4%, in the fall of 2023, they stayed there for about seven weeks and were back below 7% by mid-December.
But no one can promise when rates will fall, or how far. Since 2023, rates have mostly stayed between 6% and 7%, and the 3% mortgages of 2021 are not likely to return. Buyers should choose a payment they can live with comfortably at today’s rate. A refinance should be a bonus, not a requirement. Ask your lender about options like a seller-paid rate buydown, which can lower the payment for the first few years.
The bigger picture: owning builds wealth
For most buyers, purchase timing matters far less than deciding to own. The Federal Reserve’s 2025 Survey of Consumer Finances, released this month, found that the typical homeowner had a net worth of $458,900. The typical renter had $10,600. That’s a gap of more than 40-to-1.
Not all of that gap comes from the house itself. Homeowners tend to be older and earn more. But the home is the main reason. The same survey found the typical owner’s home equity was $230,000. Each mortgage payment builds equity, and over time the home’s value tends to rise. Rent builds neither.
A buyer who waits a year for a lower rate may save on the payment. But that’s a year of rent paid and a year of equity not built. Over a decade or more of ownership, those years usually count for more than whether the rate started at 6 or 7.
For sellers: price it right and don’t wait for a return to a seller’s market
In a sideways market, the homes that sell are priced right and show well from day one. Buyers have choices, and overpriced homes sit. The longer it sits, the more buyers wonder what’s wrong, and the eventual price is often lower than if it had been priced correctly from the start.
Waiting for a better market also has costs. Taxes, insurance, maintenance, and mortgage payments add up every month. And if you’re selling to buy another home in the area, a sideways market works in your favor on the purchase side. You may sell for a little less than you hoped, but you’ll likely buy for less, too.
Spring remains the strongest season for sales here. Sellers who plan to list in 2027 should start preparing now: repairs, updates, and a realistic price based on what’s selling today.
The bottom line
A sideways market rewards preparation over prediction. Buyers who are ready, with a defined budget and a pre-approval, can negotiate well and refinance later if rates fall. Sellers who price realistically can still sell well, especially in close-in neighborhoods with limited supply.
The persistence forecast says tomorrow will look much like today. That’s not a reason to wait. It’s a reason to make a plan based on the market we actually have.
This article is for general information and isn’t financial advice. Talk with a lender about your specific situation before deciding on rates or refinancing.
