Should I Buy a House Now or Wait?
Learn the right questions to ask yourself to determine if now is the right time to buy or if waiting is the better move.
There were many homebuyers who stepped back to the sidelines in 2024 - waiting for prices or mortgage rates to fall. They were sorely disappointed. The U.S. News Housing Market Index reported that the median home price for Nashville-Davidson-Murfreesboro-Franklin is up 3.4% year-over-year as of October 2024. And 30-year mortgage rates still remain over 6% - though this is lower than the peak!
So you might be wondering, will 2025 bring more favorable conditions and, if so, will those conditions mean you should buy now or wait? Unfortunately, there is no crystal ball to predict the future and there is never a one-size-fits-all answer the question of whether now is the right time to buy. Buying now or waiting is a big financial decision and one that is dependent on your own personal circumstances. So instead, ask yourself these three questions to determine your own answer.
Can I afford the monthly payment?
This is always the best place to start. Focusing on the current interest rate and/or the prices of available homes doesn’t mean anything if you don’t know how that breaks down into the loan amount you qualify for, the monthly payment and how that works with your monthly budget. Working with a local lender can help you determine what those numbers are specifically for you.
Do I qualify at today’s rates and prices?
This goes hand-in-hand with the first question. And, takes it a step further by looking at your debt-to-income ratio and credit scores to see what the full picture of getting a mortgage looks like. Interest rate and loan amount depend on these factors and are specific to each borrower’s financial circumstances. So even if you think you can afford the monthly payment, you might not actually qualify for the mortgage. If you’re having trouble qualifying, that might be a sign to wait and work on the factors affecting your qualification.
What are my long-term plans?
If you are planning to relocate or expecting a big change in your family structure, then waiting might be the play for now. But if you know you plan to stay for a few years at least then buying is definitely the better move. Regardless of fluctuation in prices depending on market conditions, owning a home allows you to build equity with each mortgage payment you make.
There is no such thing as a “right time to buy” for everybody. The right time to buy is when YOU are financially ready.
Sources:
“Should I Buy a House Now or Wait?” - U.S. News
If you’re ready to get started on your homebuying goals for 2025, we’d love to help you. Fill out our Buyer Form and let’s chat!