Is now a good time to buy a house?

There are times when market conditions favor those looking to buy a home. When interest rates are low, buyers can save money on their mortgage. But there are also times when it can be more challenging to buy a home, particularly if there’s a short supply and house prices are rising.

You can’t control the state of the market when you’re financially ready to buy a home, but understanding the conditions at play can help you make a well-timed decision. Let’s take a deeper look into the factors to consider when deciding if now is the right time to buy a house.

Why timing your home purchase is important

Above all, what matters most when buying a home is your own financial readiness. Taking on a mortgage is a major commitment, and it’s key that you’ll be able to keep up with your monthly payments. The timing of your home purchase can impact your ability to afford to buy. While there is no perfect time to buy a home, it’s wise to be aware of the market conditions that impact what you’ll have to pay.

The timing of your home purchase can influence a variety of factors, including:

• The purchase price of the home
• The interest rate on your mortgage
• How easy it will be to find the home you’re looking for
• Your ability to get approved for a mortgage
• How easily you’ll be able to afford your mortgage payments
• The leverage you have when negotiating with a seller
• The amount of competition you’ll be facing from other buyers

Consider your personal needs

Whether it’s the right time for you buy a home can depend largely on your own personal needs. Major life events and lifestyle preferences often influence the desire to plant roots.

Location stability

Buying a home means making more of a commitment to a location than is required with renting. Renters can move on relatively short notice, even if it means paying a fee to break their lease. If a homeowner wants to move, they may have to either sell the home or rent it out. Before buying a home, carefully consider how suitable the location is for your job and family situation. It’s also important to think about how long you plan to live there. It typically takes 5 – 7 years to recoup the up-front costs of buying a home.

Major life events

There are certain life events that tend to trigger changes in your living situation that may result in a home purchase. Traditionally, it’s been common for couples to buy their first home together after they get married. Of course, that’s dependent on any couple’s financial readiness. Some couples continue renting for a few more years until they can more comfortable afford all the costs of homeownership. Other couples decide to buy a home after they become parents and need more space.

These types of life events can also impact the type of property or location desired. Some parents choose to buy a home in a specific area known for having a good school district. Once the kids are grown and out of the house, some parents choose to sell their home and downsize to something smaller. Retirees may become overwhelmed by the costs and responsibility of homeownership and may decide to sell their home and rent at that stage of life.

Lifestyle preferences

It’s not just retirees who decide the burdens of home maintenance and repairs aren’t worth the autonomy of homeownership. If you don’t want to handle the cost and the headache, you might decide to keep renting.

If you like to travel, you may decide to allocate your budget to that instead of saving up to make a down payment. If you like to move frequently and aren’t ready to commit to a home or location, renting might be better for you.

Then again, if you need more space and are ready to plant roots, you might be ready to become a homeowner. One of the biggest perks of buying a home is it gives you the opportunity to build equity and wealth as you pay back your mortgage. Be sure to consider how the pros and cons of buying a home affect your lifestyle, priorities, and goals.

Assess your financial health

Perhaps the most important consideration when deciding whether you’re ready to purchase a home is making sure you can comfortably afford the costs of buying and owning. You’ll also need to meet the financial requirements set by your lender.

Monthly budget

In order to determine how much house you can afford, take a look at what your monthly budget can accommodate. Remember, buying a home requires both upfront costs - like your down payment and closing costs – as well as recurring costs - like your mortgage payment, repairs, and maintenance. Homeowners are advised to set aside roughly 1% to 4% or the home’s value for annual maintenance.

It's also important to make sure that your housing costs don’t eat up too much of your budget. When the amount you pay for your home each month leaves little income for the rest of the budget, it’s called being “house poor.” Homeowners are encouraged to follow the 28/36 rule, which states that no more than 28% of your income should go to housing costs, and no more than 36% of your income should go toward all debt.

You can use our home affordability calculator to get a better idea of how your income, savings, and debts can buy you in different markets.

Income stability

In order to get approved for a mortgage, the lender needs to know you have reliable income and will be able to keep up with your mortgage payments. Lenders typically ask to see at least the last 2 years’ worth of W-2 or 10-99 forms that prove you have steady work. It’s also important to consider your current job stability. Account for how market changes can result in layoffs, and some types of jobs are more sensitive to economic volatility. If you’re buying a home with a partner, consider the likelihood that either of you might experience job loss or a promotion that results in a pay increase. If you’re buying a home by yourself, your income stability is that much more important.

Credit score

Your credit score is a figure that lenders use to gauge how well you’ve managed your finances and other debts. This figure not only impacts your eligibility but also the interest rate you’re offered. In general, buyers with higher credit scores get offered lower interest rates, which can help you save on interest and reduce your monthly payment.

To get a conventional loan, you’ll typically need a credit score of at least 620. To get an FHA loan with Rocket Mortgage^®, you’ll need a credit score of at least 580. Some lenders offer FHA loans to borrowers with credit scores as low as 500, but you’ll need a minimum 10% down payment. If your credit history isn’t so hot, you can work to improve your credit score by making on-time payments and paying down debts.

Down payment

Another factor that impacts the timing of a home purchase is how long it takes to save up a down payment. Your down payment is reflected as a percentage of the total purchase price. The minimum down payment required will depend on your loan type:

• Conventional loan: 3%
• FHA loan: 3.5%
• VA loan: No down payment required
• USDA loan: No down payment required
• Jumbo loan: 10% – 30%

Down payment assistance programs are offered by state and local governments as well as nonprofit organizations geared toward helping first-time home buyers come up with the up-front costs.

Beyond the minimum requirement, the size of your down payment will also impact your mortgage payment and the amount of equity you start off with. Making a larger down payment means you’ll need to borrow less money, which could give you more affordable monthly payments. If you make a down payment of at least 20% on a conventional loan, you’ll be able to avoid paying for private mortgage insurance (PMI).

The down payment calculator from Rocket Mortgage can help you determine what kind of a down payment you would need given your home purchase price, income, and credit score.

Debt-to-income ratio

Your debt-to-income ratio (DTI) is a figure that tells lenders how much of your current income must go toward your other debts. You can calculate your DTI by adding up all of your monthly debts and dividing that figure by your gross monthly income. Lenders typically set a limit on how high your DTI can be in order to qualify for a mortgage. While exact DTI requirements vary depending on the lender, you’ll typically need it to fall under 50%.

Understand housing market conditions

Housing market conditions are always changing. Sometimes, the market favors buyers, while other times conditions can make it more challenging to purchase a home. It’s important to understand current market conditions - as well as forecasts of where the market may be headed – to make an informed decision on whether now is the right time for you to buy.

Mortgage rates

The interest rate you’re offered on a mortgage will be based on both your financial information and current market conditions. Saving just a fraction of a percentage on your interest rate can get you a more affordable monthly payment and help you save thousands on your mortgage overall.

Mortgage rates hit historic lows at the height of the COVID-19 pandemic in 2020 and 2021. In the years that followed, the Federal Reserve introduced a series of federal funds rate hikes to battle inflation. After holding the federal funds rate steady for the first 9 months of 2025, in September 2025 the Fed reduced the target range for the federal funds rate by a quarter of a percentage point from 4.25% - 4.5% to 4.00% - 4.25%, indicating that mortgage rates could begin dropping.

As of November 2025, the average interest rate on a 30-year fixed-rate mortgage was 6.3%.

Home prices

While home prices can fluctuate in the short term, they have historically risen over time. During the 10 years between 2012 and 2022, home prices rose dramatically. As of August 2025, the median sales price for a new house was $413,500. Take a look at the median sales price for a new home on the market over time:

• August 2025: $413,500
• August 2020: $321,400
• August 2015: $293,000
• August 2010: $226,600

When housing prices rise, it increases the size of the down payment you’ll need and the amount you’ll have to borrow. This can price many would-be buyers out of the market. Sometimes housing prices drop, most notably following the 2008 housing crisis and Great Recession.

Housing supply and demand

Another factor that impacts the timing of home purchase is the supply of available homes on the market relative to the demand for homes.

When supply is low and demand is high, it’s considered a seller’s market because buyers must compete against each other. Buyers may choose to waive contingencies and offer a higher purchase price to make their offer stand out.

When supply is high and demand is low, it’s considered a buyer’s market. This can give buyers more leverage to negotiate with the seller and ask them to reduce their price.

Currently, the U.S. housing market is considered a buyer’s market, as sellers outnumber buyers by over 500,000. This is due to a variety of factors, including rising home prices and mortgage rates.

Home sale trends

Another housing market indicator to pay attention to is how long it’s taking homes listed on the market to sell. According to October 2025 Redfin data, the median number of days homes spent listed on the market was 51.

Only 25% of homes sold above listing price - down 2.5 points from last year - and 22.5% saw price drops - up 17% from the same time last year. When more homes are seeing price drops, it can give buyers more of an advantage when it comes time to negotiate price.

There are also seasonal trends that affect the timing of a home purchase. Spring and summer tend to be the most competitive times of year with the most inventory, while fall and winter tend to be slower with better prices and less competition.

How to decide when to buy a house

Once you’ve examined your finances, your needs, and the current market, there are some cases when it can make sense to buy now and other times when it might be best to wait.

When you might want to buy now

It may make sense to buy now if:

• You have saved to cover the up-front costs
• You have enough income and job stability to keep up with mortgage payments.
• Your credit score and DTI meet lender requirements.
• The house you’re looking for falls in your price range.
• Interest rates are low or dropping.
• You plan to live in the house for a long time.

When you might decide to wait

It may not be the right time for you to buy a home if:

• Home prices and mortgage rates have priced you out of the market.
• You would benefit from saving up for a larger down payment.
• Your credit score or DTI don’t meet lender requirements.
• You’re experiencing changes in your job or income.
• You plan to move again in the next few years.

FAQ about being ready to buy a home

Still wondering if it’s a good time to buy a house? The answers to these frequently asked questions may help you get closer to deciding for yourself.

Can I be ready to buy a house even with a low income?

Buying a home if you have a low income can be possible as long as your budget can cover your mortgage payment. For example, if you don’t have as much money coming in, but you can show the lender that you have enough savings and assets to keep up with your mortgage, you could still get approved. You can also consider down payment assistance programs and other government-backed mortgages like FHA loans that are designed for low- to moderate-income buyers. Our mortgage calculator can help you figure out a home price and down payment that can fit into your budget.

How far in advance should I start preparing to buy a home?

The amount of time it takes to buy can depend on your financial readiness and the supply of available homes on the market. While the home buying process typically takes an average of 45 to 60 days, you’ll likely want to start planning at least 6 months to a year out. That will give you time to get your finances in order, save for a down payment, complete the preapproval process, and start house hunting.

Should I wait for interest rates to come down before buying a house?

While mortgage rates have changed, even the best forecasters can’t know what the future holds for sure. If current rates prevent you from being able to afford a mortgage, then you’ll need to hold off. If you can qualify for a mortgage you can afford, you could refinance if rates drop in the future.

What happens to the housing market if there’s a recession?

A recession is a downturn in the economy that lasts at least 3 months. Each recession has its own context and contributing factors, but can result in lower interest rates and housing prices. It can also mean reduced competition from other buyers. If you do decide to buy during a recession, it’s a good idea to carefully assess your finances and job situation to make sure you can endure the economic turbulence.

Is it better to wait until a buyer’s market to buy a home?

In a buyer’s market, buyers have an advantage that can help them get a good deal on the home they want to buy. However, you can’t control the market and should also consider your own personal timeline. An experienced real estate agent can help advise you on how to best time your home purchase given current market conditions.

The bottom line: The right time to buy a house is up to you

In an ideal world, the time when you decide you’re ready to purchase a home would coincide perfectly with a buyer’s market. If inventory is high and mortgage rates are low, you could get a great deal on a home. Unfortunately, the market is always changing and there are many factors out of your control. The right time for you to buy a home will also depend on your personal timeline and financial readiness. Be sure to consider your budget to understand what you can afford.

If you’re ready to start your home buying journey, start an application with Rocket Mortgage today.