Should I Buy a House Now or Wait?

You should buy a house when you’re ready, and feel you can afford the additional mortgage costs. The housing market will always see fluctuations in availability, demand, interest rates, and home values — which can all impact your ability to buy a house now or later. If waiting to buy a house makes the most sense for your financial situation, then you should wait. If you’re ready to buy a house and can afford it, consider buying one now instead of waiting. Our loan officers at Zillow Home Loans* are available to answer your mortgage pre-qualification questions, and our Zillow Premier Agent partners can help you begin your search.

How is the housing market right now?

The housing market is constantly changing, but you can stay ahead of industry shifts by monitoring Zillow’s Market Reports. Here are some areas you’ll want to keep an eye on when accessing the current market to determine the best time to buy a house:

Home prices

The cost of buying a home today is obviously not the same as 10 or 20 years ago, but the value of a home can change every year. From 2023 to 2024, home values in the U.S. increased 2.4% — that’s a $8,000 increase in a single year. The type of home you choose, the location, availability and competition all impact the price tag.

House availability and competition

The number of homes for sale and the number of interested home buyers will tell you if the housing market currently favors buyers or sellers. When there are more homes for sale and fewer home buyers, this is referred to as a buyer’s market. You’ll often have the upper hand when it comes to negotiating the home price and getting seller concessions. When the buyers outnumber the available homes for sale, this creates more competition. Sellers often receive more offers and therefore have more negotiating power when it comes to the price of the home.

Mortgage rates

If you’re financing your home purchase, the best time to buy a home will also depend on mortgage interest rates. Lower rates often lead to more competition, but they can also make qualifying for a mortgage more feasible. When interest rates are high, you may decide to wait to buy a house or explore ways to secure a lower rate. According to a 2024 Zillow survey, the most common explanation for how mortgage buyers secured a rate lower than the “market standard” was by receiving a special rate for home financing from the seller or home builder. If a lower rate isn’t currently an option, you can also consider refinancing into a lower rate or lowering your monthly payment a few years down the line.

Affordability

The annual median household income among home buyers is approximately $97,600, compared to the national median household income of $74,600. A higher income and lower debts can make buying a home more affordable. You can also explore more affordable markets and consider relocating to increase your home buying budget. The bottom line is that buying a home needs to meet your affordability requirements. Knowing how much you’re comfortable spending on a home will help you determine if you should wait to buy a house.

Should I wait to buy a house?

You should wait to buy a home if you’re not financially prepared for the upfront and ongoing costs of homeownership. Here are some other reasons you might choose to wait to buy a house.

You can’t find the right home

If you’re struggling to find a home that meets your needs, budget, and preferences, it may be better to wait. A home is a significant investment, and rushing into a purchase that doesn’t align with your needs or goals can lead to buyer's remorse. Buying the wrong home can also lead to additional expenses if it’s an older home that needs repairs or you choose to move again soon.  

You want to improve your affordability

If your credit score needs work, you have high levels of debt, or you don’t have enough saved for a down payment or emergency fund, it’s better to wait and work on strengthening your finances. A strong financial portfolio will help you secure better mortgage terms and interest rates, which will help reduce the cost of buying a home.

Resources to help you improve your affordability:

• How to build credit
• How to pay off debt
• How to save for a down payment

You’re buying in a seller’s market

A sellers market occurs when home demand exceeds supply, resulting in more competition among buyers and often higher sale prices. If you’re in a seller’s market right now, you may consider waiting to buy a home when the market favors buyers to have more negotiating power and avoid a bidding war with other buyers who may push up the price.

Interest rates are on the rise

Your interest rate directly impacts the total cost of your mortgage. Higher interest rates can increase what you owe over the life of your loan by hundreds of thousands of dollars. They’ll also increase the amount of your monthly mortgage payments. If the average interest rate in your area is currently high or steadily increasing, it may be smarter to wait until the rates drop to a percentage you can afford long-term to prevent getting locked into an expensive mortgage. 

When is a good time to buy a house

If you’re financially ready and homeownership is your priority, now might be the right time to buy a home. Here are some scenarios that might help you determine if now is a good time for you to buy a house:

You have a strong financial profile

Most lenders prefer you have a minimum credit score of 620, stable income, a DTI below 43%, and sufficient funds for a down payment. They also like to see ample cash reserves and an emergency fund, although it’s not required. These things put you in a solid financial position to buy and own a home, as they can help you secure favorable terms and rates and afford ongoing homeownership costs.  

Interest rates are dropping

As interest rates drop, it may be the perfect opportunity to buy a home and lock in a lower rate — especially if you have a strong financial profile. Even a slight decrease in interest can translate to significant savings over the life of your loan.

You have job security

A stable and consistent income puts you in a better position to afford the upfront costs and long-term financial commitment of owning a home. Most lenders prefer you to have at least two years of consistent work history. However, starting a new job within the same field or advancing to a top-level position with a higher salary can be seen as a green flag. 

You plan on staying for a while

The costs of buying and selling a home are significant, which is why real estate experts typically recommend purchasing a home that you plan to stay in for at least five to seven years. This amount of time allows you to build up savings and equity in your home. It’s especially advantageous if you choose a property that will continue to appreciate in value if you ever plan to put it back on the market or refinance your mortgage.

New homes are being constructed

New home construction projects can increase the housing supply and potentially stabilize or lower prices in your area. Additionally, new homes often come with modern features, warranties, and more energy-efficient technology that can help you save on utility costs.

*An equal housing lender. NMLS #10287