Should I Buy a House Right Now?

You’ve done the math, scrolled the listings, and now you’re stuck on the big question: should I buy a house in 2025?

With memories of ultra-low mortgage rates from the COVID-19 era still fresh, it’s no surprise today’s market feels like a different world. Back then, interest rates dropped below 3%, making homeownership more affordable than ever, igniting a red-hot buying frenzy.

Fast forward to 2025, and the game has changed entirely. Interest rates are higher; home prices are still elevated in many parts of the country. Also, for some, renting seems like the cheaper short-term option.

Don’t worry, all of this doesn’t mean buying a home now is off the table. It just means the decision requires a bit more strategy.

Let’s review what you should consider so you can confidently decide whether to jump in now or wait for better timing.

Pros of Buying a Home in 2025

Despite rising interest rates and increased home prices, there are several compelling reasons show why 2025 could be a good year to take the plunge. As a buyer, you can benefit from a housing market gradually shifting in your favor.

Greater Selection and Less Bidding-War Pressure

Compared to the frantic, highly competitive market of 2020 and 2021, today’s buyers often find more homes to choose from. Housing inventory, though still tight in many regions, is on the rise.

This means less bidding war pressure, fewer all-cash offers, and more room to negotiate. You may be pleased to know that increased availability might tip the scales toward buying now rather than waiting.

Sellers Are More Willing to Negotiate

With more homes on the market and less urgency, sellers are increasingly open to buyer concessions. Buyers can often secure price cuts or closing-cost credits that weren’t common during the peak pandemic years.

This flexibility creates opportunities to reduce your overall out-of-pocket expenses, making homeownership more affordable even in a higher-rate environment.

Potential “Refi Later” Upside

Many experts forecast that the Federal Reserve may ease interest rates by 2026, potentially allowing homeowners who buy now to refinance at lower rates later. This strategy, called “buy now, refinance later,” can be appealing if you want to lock in a home and ride out current market conditions while positioning yourself for future savings.

While no one can predict exact timing, the possibility of rate relief provides a useful cushion for buyers hesitant about higher monthly payments.

Rising Rents Make Ownership Cost-Competitive

Another important factor to consider is rental inflation. In many metro areas, rents continue to climb sharply, which can make owning a home more cost-competitive.

If you pay high rents now or fear your rent will increase to a price outside your range, buying a home might offer more predictable housing costs and long-term equity growth.

Reasons to Wait to Buy a Home

While there are benefits to buying this year, understanding why waiting might be the better option for some is equally important.

Interest Rates Remain Elevated

Though mortgage rates have come down from their recent peaks, they are still roughly double the lows seen in 2021. Higher rates translate into significantly larger monthly mortgage payments, which can stretch budgets and reduce buying power.

Modest Home Value Appreciation Expected

Home values are forecast to grow modestly, around 2.6%, in 2025. This slow appreciation means near-term equity gains may be limited compared to previous years.

If you’re buying primarily as an investment or for quick financial gain, the current market may be less appealing. This makes waiting a consideration, especially for wealth-building purposes.

Economic and Job Market Uncertainty

Uncertainty around the economy and job security remains a concern for many buyers. Recent dips in consumer confidence reflect worries about inflation, geopolitical tensions, and a possible slowdown in economic growth.

If your employment situation feels unstable or you’re unsure about future income, holding off on a major purchase like a home can help reduce financial risk.

More Inventory Forecast Later in 2025

Many analysts expect additional housing inventory to come on the market later this year.

An increase in supply could further cool home prices and reduce competition. If you’re not in a rush, waiting to buy until this additional inventory arrives might mean better deals, inventory, and even more bargaining power.

Market Outlook: What Experts Predict for 2025-2026

The housing market in 2025 is navigating a complex and often unpredictable economic environment. So far this year, we’ve seen significant volatility, not just in home prices but also in the stock market, mirroring broader uncertainty across financial sectors.

A key driver of this turbulence is the Federal Reserve’s ongoing stance on interest rates. As efforts to control inflation continue, the Fed may push rates even higher, although a shift toward easing could quickly reignite buying activity.

At the same time, global economic pressures, from trade tensions and supply chain disruptions to ongoing geopolitical conflicts, add layers of risk that influence both consumer spending and investment decisions.

Meanwhile, the labor market remains tight, with low unemployment, but wage growth and job stability vary widely by industry, shaping buyer confidence and overall mortgage affordability.

In light of these conditions, you should approach the market with both caution and flexibility, as further fluctuations in rates and prices are likely.

Homebuyer Readiness Checklist

Before jumping into the market, consider this checklist to evaluate if you’re truly ready to buy a home in 2025. Answering “yes” to most of these points suggests buying now could be a smart move, while more “no” answers might indicate it’s better to wait.

Strategies to Buy Smart in Today’s Market

If you decide that now is a good time to buy a house, adopting smart strategies can help stretch your budget further and secure better terms. Use the following approaches to navigate the homebuying process with clarity and confidence.

Negotiate Seller Concessions or Rate Buydowns

In our current lower-paced market, many sellers are motivated and more open to negotiation. One effective tactic is asking for seller concessions, such as covering part or all of your closing costs, which average between 2% and 5% of the home price.

Another powerful option is negotiating a rate buydown, where the seller pays to lower your interest rate. For example, on a $400,000 loan, a seller-paid buydown of 0.5% could save you around $120–$150 per month in mortgage payments, adding up to thousands in the first few years of ownership.

Compare 2-1 Buydown vs. Permanent Points

Both a 2-1 buydown and paying permanent points upfront can reduce your mortgage interest rate, but they work in different ways. A 2-1 buydown temporarily lowers your rate by 2% in the first year and 1% in the second year before returning to the full rate in year three. For instance, if your loan rate is 6.5%, you’d pay 4.5% in year one, 5.5% in year two, and then 6.5% from year three onward, which is ideal if you plan to refinance or sell within a few years.

On the other hand, paying points (e.g., 1 point = 1% of the loan amount) lowers your rate for the life of the loan, which might make more sense if you plan to stay put for a decade or more. A quick break-even analysis, or dividing the upfront cost by your monthly savings, can help you decide which option offers the better value.

Shop Multiple Lenders

Rates and fees can vary widely between mortgage lenders, and the difference could cost or save you tens of thousands over the life of the loan. For example, one lender may quote you 7.0% with $3,000 in fees, while another offers 6.5% with only $1,000 in fees.

Always request a Loan Estimate (LE) and ask for the “net cost” after credits and points. Some buyers save over half a percentage point just by comparing offers from at least three to five lenders.

Consider New-Construction Incentives

If you’re open to buying a newly built home, builders often provide enticing perks to close deals quickly. These include interest rate locks, upgraded countertops or flooring, or even $10,000+ in closing cost credits.

For example, a builder might offer qualified borrowers a 5.5% fixed rate through partnerships with preferred lenders, even with a market rate of 6.5%. That kind of incentive can be a game changer in terms of affordability and long-term value.

Lock Shorter and Float Down if Rates Dip

Locking in your mortgage rate early shields you from market spikes, but many lenders also offer a float-down option, which allows you to take advantage of lower rates if they drop before closing.

Say you lock at 6.75%, but rates fall to 6.25% during underwriting; a float-down could let you grab the lower rate without starting over. Not all lenders offer this, so ask upfront and ensure you understand the terms, such as timing windows and associated fees.

FAQs About The Best Time to Buy

Still wondering whether now is the right time to buy a house? These common questions can help you make a more confident, informed decision based on today’s market dynamics.