Bad Time to Purchase a Home?

Here’s Some Good News, Some Bad News, and Things to Pay Attention to

Buying a home has always been a big decision, and in this unpredictable economic climate, the decision just got that much more challenging. The sky-high interest rates are messing with a price-worthy economy and have plenty of people asking, “Is it a bad time to buy a house?”

Based on recent data, it’s clear that consumer sentiment agrees. In July 2025, the median sale price for existing homes in the U.S. was $422,400, making it the highest recorded price for July since the National Association of Realtors (NAR) began recording prices. It’s not surprising then that almost 77% of consumers surveyed by Fannie Mae felt it was a bad time to buy a house.

Still, a few buyer-friendly signs may have appeared. Even though mortgage rates still demonstrate an upward trend, the slow pace is showing more buyer optimism, and rates have eased even slightly from their peaks in 2023. Then inventories have been climbing with more choices for buyers and fewer bidding wars forming. What about buying now, or now, maybe? Let’s explore the pros and cons of buying a house right now and the factors that matter most.

The distinction between home ownership and renting

Homes have generally two meanings: as residences and as the largest borrowing transactions that people will likely make. Practically speaking, timing is a problem when buying a house. Timing is something that we generally would prefer to avoid, and while timing is annoying, choosing the correct timing could mean the difference between overpaying for the house or even worse, entering into a mortgage that you won’t be able to pay, or the bad timing of moving house simply because your lifestyle has changed overnight! Houses are increasing in price, interest rates are increasing, and so you could see this all as bad news for being a 1st home buyer, or you could see it as an opportunity to lock in some equity before it becomes more difficult to enter the housing market. Clearly, timing can present a great challenge, given the rising prices, rising borrowing costs, or just plain missing the opportunity to start building equity. So, is it the right time to buy a house? The answer will never be simple, but timing and asking the right questions could make all the difference.

Pros and Cons of buying a house today

There are very real reasons to consider buying a home today, even in a higher-priced market.

The benefits of purchasing a home right now

Build equity after all

The rent that you are paying is only affording someone else with ownership interest in their property, while your mortgage payment is building your ownership interest in the exact property. And just as a reminder, “the sooner you buy, the sooner you build equity,” which is another tier of legacy.

Break the cycle of uncertainty

In 2023, mortgage interest rates crashed through the 8 percent mark, and it made way for affordability issues statewide. Now, mortgage rates are sitting at an average of 6.62 percent in August 2025, and there is still volatility. Buy now and lock in your financing to protect against any increases in the future. As mortgage advisor Melissa Cohn once said: “You can marry the house, but you can divorce the rate.” Which means you can refinance the home if you need to in the future when/if rates come down.

Many more homes to choose from now

The housing inventory is up, now, at the highest level it has been in five years, being up about 16% from 2024. Homes are also taking longer to sell. In July of 2025, homes sold had an average of 28 days on market to sell compared to 24 days in July of 2024. This suggests buyers do not feel as rushed to rush into a bidding war, which also gives them more room to negotiate.

Tax and Financial Benefits

Homeownership has tax advantages, with deductions for the mortgage interest and property taxes. Homeownership has tax deductions that can help offset some of the higher costs of buying a home right now.

Reasons Not To Buy A House Right Now

For many individuals, there are very good reasons to think twice:

Home Prices Are At An All-Time High

With almost two years of continuous uptick in year-over-year price changes, affordability still remains a factor. While homes are selling in many areas, they are simply out of reach for many first-time buyers.

Mortgage Rates Are High

Since peaking earlier this summer, mortgage rates have fluctuated a bit. Regardless of what happens, they are still well below the 3% rates many of us heard others talk about just a few years ago.  Higher monthly payments on average translate to tens of thousands and millions of dollars more in interest over the life of a loan.

Economic Roulette

Economic speculation about a recession is a risk all by itself. If you lose your job or have your income reduced in any way, making mortgage payments could be concerning.

True Ownership Costs

Financing, repairs, insurance, and taxes can really add up. Many first-time buyers do not factor these costs into their budgets, and, in addition to a rate increase, this will likely impact their household budgets.

Should You Buy a House Now?

There is less matter upon the state of the market and more upon personal readiness. Experts advise you to always ask yourself the three questions below:

What is my credit score?

Mortgage lenders normally reward the best borrowers with their best rates. If your median score is between 750-800, you will be in the most advantageous position to secure cheap financing.

Am I saving enough for a down payment?

The bigger the down payment, the less you will borrow, and the less you will pay in interest overall. Lenders want to see that you have cash to fund emergencies as well.

Should I stay for the long haul?

The closing costs and transaction fees can accumulate quickly. Therefore, you need to stay in this house for a minimum of 5–7 years to have an economically worthy homeownership, or have it rented out if at any point you need to move. If you can answer “yes” to all three, then now may indeed be a good time to buy a house, despite the broader challenges.

On When to Buy a House: When Waiting Is Justified

Sometimes waiting is actually the better option. Consider waiting if:

1. Local prices keep going down. National averages will sometimes tie your hands in disguising regional trends. For instance, Raleigh, NC, saw almost a 6% increase in prices through 2025, and nearby Chapel Hill saw an 18% decline. If your market is going south, maybe it would pay to wait.
2. Inventory is going through a surge. More inventory means that the buyer will have more power for bargain-hunting. If the area’s seen a rapid spurt in supply, waiting can strengthen negotiating leverage.
3. Your finances aren’t ready. Credit scores are low, debts are high, and savings for down payments are scant; it is better advised to hold on for now. Use this time to build credit, reduce debts, and increase savings so one can get better terms later.

The Risk of Waiting for Too Long

It’s always tempting to want to wait for prices or rates to go down. But there can be a downside to it. First of all, a mortgage rate will never necessarily go down just because of the Federal Reserve cutting its discount rate; hence, one might be left chasing an unpredictable market. Another drawback is that even an incremental increase in mortgage rates has a huge, damaging effect on affordability. For instance, in the case of a $350,000 home with 20% down, an increment in rates from 6.5% to 7% would hike your monthly payment by $93, and that on the 30-year term, it would be over $33,000.

Local Market Matters

Real estate is hyperlocal. National trends are not indicative of what would be going on in your specific city or even neighbourhood. This is why it is paramount to employ the services of a real estate agent who has gained experience in the locale. They will enable you to interpret inventory levels, pricing trends, and economic factors peculiar to your area.

What About a Recession?

Buying during a recession is risky, especially if one does not feel secure in their job. Lenders will be less willing to approve mortgages for those whose income cannot be confirmed with security, and local housing markets might stay stagnant.

For financially secure buyers, recessions, on the other hand, can offer opportunity. With less competition, you may be able to negotiate discounted prices on properties that would have otherwise drawn multiple offers.

In Conclusion

Hence, is this a bad time to purchase a house? The view is by no means black or white. High national prices and mortgage rates are a hindrance to the home-buyer. However, with growing inventory, slightly lower interest rates, and increased negotiating room for buyers, there might just be an opportunity for the well-prepared.

The infallible time to buy a house is not dictated by market buzz alone; rather, it depends on how good a credit standing you have, your savings, your long-term prospects, and the vicinity of your local market. So, if those factors check out, then by all means, buy now, or else you may miss out on the growth of equity and stability. If you aren’t eligible now, then utilize the time to strengthen your position.

For many, homeownership is a financial and personal crossroads. So while weighing the advantages and disadvantages of buying now, studying the parameters of your local market, and sketching your game plan, you will be more prepared to decide on whether now is the time for you.