Should I Buy a House Now or Wait?

Owning a home is part of the American Dream. But if you’re thinking about buying a house, you might be wondering if now is a good time.

Various factors can influence your decision, such as mortgage rates, home prices, home availability, and home insurance costs. But the biggest consideration should be your financial readiness.

Here’s how to know if you’re financially ready to purchase a house now based on your savings, credit score, debt, and lifestyle, as well as factors like housing market conditions in your area.

Are your finances ready for homeownership?

If you’re wondering if you should buy a house, the most important factor to consider is your financial situation. If you have excellent credit and enough money saved for a down payment, you can typically qualify for the most favorable loan terms. On the other hand, if you have bad credit or a significant amount of debt, affording a home will probably be more difficult.

Here are some of the criteria that’ll help you decide if you’re financially ready to purchase a home.

You have savings

Purchasing and owning a home can be very expensive. It’s important to have enough money saved for the various costs you’ll face up front and after you buy the house.

Some banks and government programs offer programs that cover down payments and closing costs, but if you don’t qualify for them, you typically need a down payment of 3% to 20% of the purchase price, depending on the home loan.1 You usually can’t finance the down payment and closing costs, so you’ll need that money available in cash.

You have good credit

When you apply for a mortgage, the lender will review your credit score to determine your eligibility for a loan. Not only does your credit score determine your mortgage eligibility, but it also affects your interest rate.

A good credit score is any score higher than 670.2 Borrowers with a good credit score typically have few to no negative marks on their credit history and a reasonably low debt-to-income ratio (DTI). Potential buyers with excellent credit (800 and above) are usually in the best position to purchase a home because they can qualify for the lowest interest rates.

If you have fair or poor credit (669 or below), buying a home is usually much harder and more expensive because you’ll pay higher rates. In that case, it’s probably worth improving your credit score before you buy a house.

You have little or no debt

Most Americans have some debt, such as student loans, auto loans, or credit card balances.3 But when it comes to purchasing a house, some types of debt are better than others. For example, it’s usually OK to have an existing car loan when you purchase a house.4 But if you have high-interest credit card debt, you should try to pay it off before you start shopping for homes.

When you apply for a mortgage loan, one of the factors lenders look at is your DTI ratio. This is the amount of debt you have in relation to the amount of money you make. If you have a low DTI ratio, you can typically qualify for more favorable terms. Borrowers with a high DTI ratio usually have higher mortgage payments.

You have income and lifestyle stability

Before you buy a home, it’s a good idea to look at your monthly income and lifestyle. You’ll need to have a steady income from your job and live within your means. If you don’t have a stable income or if you’re living paycheck to paycheck with no money left over to save, now might not be the best time to purchase a house.

Another question to ask yourself when buying a home is whether you’re ready to put down roots in one place. If you don’t intend to stay in one location for very long, or if you might have to move to a different area for your family or career, you’re probably better off renting instead of buying a house.

Is the market favorable in your desired location?

Your personal financial situation should be a key factor in your decision to purchase a house. But it’s also important to look at market conditions, especially if you’re committed to buying a house in a specific location.

Here are some of the factors to keep in mind.

Home prices

The average home price in the U.S. was $512,800 as of the second quarter of 2025, according to the Federal Reserve Bank of St. Louis.5

Home prices are continuing to rise, but the National Association of Realtors (NAR) says the pace has slowed significantly compared to recent years. The NAR predicts that home prices will rise by about 1% in 2025 and increase by 4% in 2026.6

Prospective buyers who are curious about 2026 house price predictions for their specific location should speak with a local real estate agent.

Mortgage rates

If you’ve been shopping for a home, you may know that mortgage rates are increasing. In January 2022, the average 30-year fixed mortgage rate was 3.22%. In 2024, the average rate had increased to 6.7%, according to finance website The Mortgage Reports.7

For 30-year mortgages in 2025, the average has been about 6.8%, which is slightly higher than the 2024 average.

Heading into 2026, many real estate professionals believe that mortgage rates will come down, as the Federal Reserve could cut its short-term rate anywhere from four to six times over the next 12 to 18 months. NAR forecasters say this could cause rates to drop to around 6%, which would drive home sales up by 14%.

But for homebuyers who’ve been priced out of the market, low interest rates in 2026 could increase competition in the real estate market.

Home inventory

The inventory of homes on the market has hit a five-year high. In June 2025, 1.36 million homes were for sale — the most since November 2019, Zillow reports. Home inventory is about 21% less than pre-pandemic averages for June, but Zillow predicts that inventory will reach pre-pandemic numbers by the end of 2025.8

Even as home inventory rises, Zillow reports that single-family permitting for new construction homes dropped 6.3% in the first half of 2025 after rebounding in 2024.9

Buyer’s vs. seller’s market

Market conditions can partially determine whether you should buy a house now or wait. In a buyer’s market, competition is low because more homes are for sale and fewer people want to buy a home. In a seller’s market, fewer homes are available than people who want to purchase, which creates a competitive environment.

To determine if you’re in a buyer’s or seller’s market, you can meet with a local real estate agent, look at available inventory and comparable homes that have sold, and use tools like Zillow’s Market Heat Index to see where the top 100 U.S. markets stand.

Home insurance prices

It’s not just house prices that are going up. The cost of homeowners insurance, which most mortgage lenders require, is also getting more expensive.

The average homeowners insurance premium is $2,532 per year for a policy with $300,000 in dwelling coverage, according to Insurify data. In several states, like Louisiana and Mississippi, the average premium is double the U.S. national average. Some of the factors driving up home insurance rates are inflation, climate change, supply chain issues, and increased home repair costs.

When it might make sense to wait

For most people, a home is one of the biggest purchases they’ll ever make. Even if you’re in a good place financially, buying a home is a serious investment. If you’re not financially prepared, it’s better to wait until your situation is more stable and you have extra cash in the bank.

Not only is buying a home expensive, but it requires money up front. In addition to the down payment, you’ll also have closing costs, realtor fees, moving costs, and other expenses that you have to pay out of pocket. Plus, you need to prepare for many long-term costs.

For example, you must pay your mortgage on time every month to avoid penalties or foreclosure. If something breaks unexpectedly — like a major appliance — you need money to replace it. You also pay property taxes, which can be expensive depending on where you live.

If you don’t have money for the expected and unexpected costs of homeownership, it’s better to wait until you can afford those costs without stress. There’s never a perfect time to buy a home, so it really comes down to your personal financial position and your goals.

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