Is It a Good Time to Buy a House?

This question is one of the most common questions we see from consumers, investors, real estate agents, and many others with interest in the real estate market.  The answer is ‘yes’.  But it also depends on your specific situation, what’s important to you, and where you are financially.

Today, the question “is it a good time to buy a house” is commonly asked because interest rates have increased significantly year over year, increasing the monthly payment for many people thinking about buying a property. Many people are wondering if now is a bad time to buy a house because of these higher payments, but it’s important to remember that rising rates have also resulted in a softening market, which means that buyers today are seeing lower median home prices and less competition, which allows for seller concessions that weren’t frequently available during the market craze of 2020–2021. Therefore, even while payments can be greater now, overall price tags might also be lower, enabling buyers to keep more cash in the bank when the deal is finalized.

What will happen to home values in the future is another factor that many people take into account when deciding whether or not it is a good time to buy a home. Many people still remember the real estate crash of 2010, but it’s crucial to examine the economics of the current market and contrast them with the disaster to determine what’s likely to occur in the upcoming months.

One of the crucial factors is supply and demand, which is a fundamental concept in economics and price. The housing supply is the next area to check for a hint on where home values will go if you believe that the US population has continued to grow and that more people will need housing.

The housing supply is significantly less than it was in 2007, just before the collapse in property values, as can be seen in the image below. In terms of supply and demand, a lack of inventory for a growing population should provide some support for home values and continued appreciation, even if that appreciation is slower than the abnormally high appreciation rates home owners saw in 2020 and 2021. However, low inventory isn’t a guarantee of home price growth. Examining these figures in your local market is crucial because real estate is quite localized, with some markets having more inventory than others as well as differing populations.

The housing supply is significantly less than it was in 2007, just before the collapse in property values, as can be seen in the image below. In terms of supply and demand, a lack of inventory for a growing population should provide some support for home values and continued appreciation, even if that appreciation is slower than the abnormally high appreciation rates home owners saw in 2020 and 2021. However, low inventory isn’t a guarantee of home price growth. Examining these figures in your local market is crucial because real estate is quite localized, with some markets having more inventory than others as well as differing populations.

So interest rates are up, but it appears home values have some support.  Interest rates also ebb and flow, so while you should never buy a home based on the hope that your payment will eventually get cheaper, that possibility does exist!  If rates dip, refinance possibilities may exist for home owners to reduce their monthly mortgage payment, but this is no guarantee – it would just be a cherry on top for today’s would be home buyers.  As you can see below, home prices have historically climbed on a consistent basis outside of the great recession over a decade ago, and for that reason home ownership has been a key metric in helping Americans establish wealth and grow their net worth.  For many, the alternative (renting) doesn’t offer that same level of financial security.

The stats show that owning a home is a terrific idea for those who can afford their monthly payment and who have the financial stability to consistently make mortgage payments, even though we’re a mortgage company and it’s in our interest (pardon the pun). Home values are well supported by the worldwide shortage of inventory, and rising interest rates have somewhat reduced demand. As a result, purchasers now have more power and control over the buying process than they did in previous years.