As of 2025, only 26% of people say now is a good time to buy a house according to a Gallup poll. This is probably due to high home prices and high interest rates. The median home price currently sits at $438,357 and mortgage rates as of May 2025 are 6.86% for 30-year fixed-rate mortgages and 6.01% for 15-year FRMs.
We’ve seen higher interest rates in the past year, so now may not be the worst time to buy. However, whether or not now is a good time to buy a house depends heavily on your unique financial situation and local market dynamics.
Key Points
• When deciding whether to buy a house, consider your financial stability, market conditions, your long-term plans, your job security, and local economic trends.
• Personal financial stability is crucial for securing favorable mortgage terms and ensuring regular payments.
• Current interest rates significantly impact the cost of buying a house, affecting monthly payments and total loan costs.
• Local economic trends influence housing demand and prices, making it important to assess the economic environment.
• Renting can be more cost-effective and flexible, while buying offers potential long-term property appreciation.
• Despite high home prices and interest rates, buying can still be a good decision if you have a stable financial situation and long-term plans for the home.
Determining When You’re Ready to Buy
Before you assess the current real estate market and pay close attention to interest rate fluctuations, it’s important to understand your financial and personal situation.
Here are a few factors you may want to consider before deciding if a new home is a good play right now.
Making Room in the Budget
When buying a home, the first thing you’ll need to budget for is a down payment.
While 20% of the home’s value is the benchmark, you may only need 3.5% if you apply for an FHA loan. But even 3.5% can be a chunk of change. If you want to buy a $200,000 house, 3.5% is $7,000.
Your home-buying budget should be large enough to cover a down payment as well as closing costs, which typically include homeowners insurance, appraisal fees, property taxes, and any mortgage insurance.
Remaining Consistent
How long do you plan to live in the city where you’re eyeing a home? If you plan on staying in the home long-term, now could be a good time to buy because staying put will give your home time to appreciate (subject to market fluctuations).
Since mortgage lenders pay close attention to job consistency and a steady income, you may also want to consider your job security. Especially during uncertain times, it’s crucial to feel confident knowing you can make your mortgage payments every month.
💡 Quick Tip: Buying a home shouldn’t be aggravating. Online mortgage loan forms can make applying quick and simple.
Checking Your Financial Profile
It’s a good idea to check your financial profile. Doing so may help you secure better financing terms when you purchase a home. Lenders will review your credit history, debt-to-income ratio, and assets, among other factors, to determine your eligibility for a mortgage.
Lenders review your credit history to gauge your creditworthiness and the level of risk to lend you money. They look at your debt-to-income ratio to indicate how much of your income goes toward debt payments every month.
If your ratio is high, it can show you’re overleveraged, which may mean you’re not in a position to take on more debt like a mortgage. You may also face a higher interest rate.
Last, a mortgage applicant can list assets like cash and investments. The more assets you have, the less risky lenders view you.
Weighing Renting Vs. Buying
You may want to compare renting vs. buying a home.
If renting a home in your community is less expensive than buying, you may want to hold off on a home purchase. Conversely, if renting is more expensive, you may be more eager to purchase a new home.
Overall, if you find that these factors point you in the direction of homeownership, it’s possible you’re ready to buy a home and can begin determining the perfect time to pounce.
Observing Interest Rates
When determining if now is a good time to buy a house, buyers should look closely at interest rates.
Financial institutions charge interest to cover the costs of loaning money when they offer you a mortgage. The interest rate they charge is influenced by the Federal Reserve, but mortgage-backed securities are considered to be the main driver.
When interest rates are low, borrowing money is less expensive for the borrower. As interest rates rise, borrowing money becomes more costly. The government has been holding rates steady recently.
But keep in mind that the rate and terms you qualify for will depend on financial factors including your credit score, down payment, and loan amount.
And, if interest rates go down after you purchase your home, you can always choose to refinance your mortgage in hopes of getting a lower rate.
💡 Quick Tip: A home equity line of credit brokered by SoFi gives you the flexibility to spend what you need when you need it — you only pay interest on the amount that you spend. And the interest rate is lower than most credit cards.
Timing the Real Estate Market
Essentially, to time any market, you want to aim to buy low and sell high. If you’re going to buy a property, you’ll want to ideally buy when there are more sellers than there are buyers—a buyer’s market.
In a buyer’s market, buyers have an abundance of homes to choose from. This may also give you leverage to ask for more concessions from sellers eager to close a deal, such as a seller credit toward your closing costs or help covering the cost of repairs.
Conversely, in a seller’s market, real estate inventory is low and demand is high, which may drive up home prices.
To identify the current market conditions, you may want to visit real estate websites like Zillow, Redfin, Realtor.com®, or Trulia to look at inventory in your area or ZIP code.
Typically, it’s a buyer’s market if you see more than seven months’ worth of inventory.
If you see five to seven months of inventory, you’re in a balanced market that isn’t especially beneficial to buyers or sellers.
It’s a seller’s market when there is less than five months’ worth of inventory.
Recommended: How Does Housing Inventory Affect Buyers & Sellers?
Understanding Local Economics and Trends
Because prices can vary vastly vary from area to area, real estate is often considered a location-driven market. This means that general rules of thumb might not be valid in every region or city.
Also, local economics may play a role in housing demand. For instance, if a large company decides to move its operations to a city, that city may experience a housing boom that creates a spike in home prices.
That’s why hopeful buyers will want to pay close attention to the economic happenings and housing trends in their desired location.
The Takeaway
If you find a home that seems right for you, your employment is stable, and you can get a home loan with a good interest rate, buying may make sense. Then again, with interest rates and home prices still being on the high side, comparing the costs of renting and buying may be called for.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
Should I buy a house before rates drop?
House prices are predicted to continue rising, though at a slower rate. If you buy a house later, you’ll probably be paying more for it. If, however, you get a mortgage now and rates go down, you can consider refinancing to get the benefit of the lower rate.
What time of year is it cheapest to buy a house?
Generally speaking, you may be able to get the cheapest deal on a house in the winter. That’s because winter tends to be the slowest season for home sales and that may give you some leverage to bargain with homeowners who are in a hurry to sell. Of course, prevailing market conditions at the time will also play into how good a price you can get.
Is it better to buy a house during a recession?
There may be advantages and disadvantages to buying a house during a recession. The house price and the interest rates are likely to be lower than they might be when the economy is stronger. However, your individual financial position and job security may not be as strong during a recession, which can lead to financial stress.
About the author
Ashley Kilroy
Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.
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