Needing new hardware is always a possibility, however I'd lean more towards you are either on the edge of your wi-fi range or you dont have the bandwidth to do what you want. To be honest though, a hard line connection is the best way to play FPS games.
A few questions for you:
Who's your internet provider?
Have you ran speed tests hard lined and then wireless?
Have you updated all your drivers lately?
Also you may try sitting right beside your router and testing your speed and move away several times retesting it as you go. This will give you a good idea of where you start losing bandwidth. Also if someone on your connection is hard lined and they are streaming, they will take priority over you.
Make sure you test your speeds daily. Anything can happen. I repair squirrel chews on Ariel drops all the time. This will play an extreme part of your Internets performance. If you have any amount of ingress in your network, internet will be affected before anything else.
Give these a shot, if you have any questions, just pm me.
Also, if you are going to by a new router and you have the money, look into the Airport. It's for a mac but also works with pc. It's range is very good and the degradation of signal is very slight.
I know you might not have an option, but something what people don't think about is wireless devices and peripherals. If you have a wireless mouse, wireless keyboard, and wireless connection....or really any combination of these you will always be outshot by someone that has no wireless when both of you have the exact same latency. So if you can help it, get hard lined. Your issue is packet loss. I have only seen that when you have wireless internet.
If all else fails, Google it and browse the links for solutions relevant to what you are having issues with