According to the National Association of REALTORS®, there was the largest increase in home prices since 1999 in 2021, when they increased 16.9% over 2020. Additionally, according to Zillow, home prices will continue to rise in 2022, rising by 17.3% by January 2023.

Not to add, the supply of houses is decreasing. Due to the lack of available homes, purchasers must pay more to secure one.

In light of the low supply and rising housing prices, many prospective buyers are left asking, "Is now a good time to buy a house?" You might be surprised by how complicated the solution is. The primary criteria for assessing if the moment is suitable to purchase a property will be discussed in this article.

Is Right Now A Good Time To Buy A House?

There are some things worth thinking about when deciding if now is a good time to buy a home. Potential home buyers should consider current and future market trends, current mortgage interest rates, home prices and inflation.

In some cases, market conditions make it more challenging for some buyers to purchase a home. For starters, in 2021, we saw interest rates reach historic lows, which made it easier for some buyers to afford housing. But unfortunately, the Federal Reserve is increasing rates to mitigate the rise of inflation.

So, while interest rates were averaging about 3%, now they are increasing to 5% – 6%. This could raise your cost to borrow by thousands or even tens of thousands of dollars over the life of the loan.

Another factor is the condition of the market. Right now, we’re in a seller’s market, which means there are more buyers looking to purchase a home than the number of homes available for sale. In a seller’s market, homes fly off the market, which can increase competition since so few buyers are fighting for the same proprieties. Buyers may bid higher since they want their offers to stand out from the rest.

Even with less-than-ideal conditions, deciding the right time to buy a home comes down to your financial situation. Your own payments, credit score and budget can make the difference when buying a home. It’s wise to assess your financial circumstances and current home prices in your community. This way, you can decide if you have enough set aside to afford the monthly payments.

Why Now Is A Good Time To Buy A House

Despite the uptick in home prices and interest rates, and minimal inventory, in some cases, it’s still a good time to buy a home. For example, if you’re ready to buy a home, you could lock in a favorable interest rate. While rates may seem high at 5+%, historically they have been much higher. Locking in a favorable rate can help you buy a home before properties increase in value and become even more expensive.

If you think that current market conditions and mortgage rates aren’t making it a favorable time to buy, you may want to wait until there is more inventory. To determine if inventory has increased, you can divide the number of homes on the market by the number of homes sales in the last month. Numbers 7 or above means there are plenty of houses available (buyer’s market). If the number’s 5 or below, it means housing supply is limited (seller’s market). Keeping track of home sales in your area will help decide if the housing supply is increasing or dipping.

It may also be a good time for personal reasons. You family may be growing, or your career or lifestyle are changing. These are great reasons to buy a house, no matter what the market.

Why Now Might Not Be A Good Time To Buy A House

Again, current housing market are making home buying more difficult and expensive right now for many buyers. Home values are high and the competition can further drive up the price.

Not only that, but buyers might be forced to make their offer more attractive by waiving contingencies or putting in an all-cash offer. For buyers that are unable to do the same, it could take forever to win a bidding war on a property.

So, monitoring the market conditions and keeping an eye on the inventory might be your best bet. This means you can enter the market when few buyers are competing for the same properties.

The current market is challenging existing homeowners looking to purchase their next home while trying to sell the one they’re living in... More