What to Consider

Is now a good time to buy a house?

Yes and no. Mortgage rates reached record lows in early 2021 but jumped in 2022. Meanwhile, strong demand for homes pushed prices and frustrated many potential homebuyers. According to the CoreLogic Case-Shiller Home Price Index, property prices rose by nearly 20 percent between May 2021 and May 2022.

However, the record-breaking housing market has finally begun to cool. Realtors report slowing price gains and rising inventories, and housing economists foresee a retreat in mortgage rates. That’s all good news for buyers.

“Mortgage rates may have already peaked and could stay between 5 percent and 5.5 percent through the remainder of 2022,” says Mike Fratantoni, chief economist at the Mortgage Bankers Association. “If that were to be the case, potential buyers, who had been scared off by the rate spike, might find their way back to the housing market.”

The price boom has created inevitable concerns about buying at the peak. Home values go up over time, but there is a possibility that prices in some places have hit a plateau.

 Buy vs. Rent Calculator. 

Should I buy a house?

Leaping homeownership can provide a feeling of pride while boosting your long-term financial outlook if you go in well-prepared and with your eyes open.

When buying a home, consider whether you want to put down roots or maintain flexibility with your living situation. How secure is your job, and can you comfortably budget for home repairs and maintenance on top of monthly housing payments? Are you ready to stay in one place, and do you have kids or family members to consider?

When should I buy a house?

In regular times, spring is the traditional start of the homebuying season, with many listings typically hitting the market. However, the market hasn’t quite returned to normal since the coronavirus upended that schedule. This winter should be relatively slow for buying, but with low housing inventory, it will still feel competitive compared to pre-pandemic off-seasons.

At any rate, your financial readiness is more important than the time of year. This means organizing your finances and credit to secure an affordable mortgage smoothly.

In addition to a down payment, potential homebuyers should have enough money to cover closing costs, ranging from 2 percent to 4 percent of the purchase price.

When budgeting for your monthly mortgage payment, factor in not only the principal amount and interest but also property taxes, homeowners insurance, homeowners association fees (if applicable), plus private mortgage insurance if you’re putting down less than 20 percent. Don’t forget to set aside money for ongoing maintenance and unexpected repairs that are bound to pop up.