Important takeouts:
If you have the means, now might be a good time to buy a house. The unstable economy has made both buyers and sellers cautious, but increasing supply has given buyers an edge. Mortgage rates fell this week, but remained volatile thanks to inflation concerns, recession fears and market volatility. Housing costs increase. Median U.S. home sales prices have been at near-record highs for the 21st consecutive month, compared to the previous year.
Spring has arrived and the main home viewing season has begun. So many home buyers wonder if it’s a good time to enter the housing market.
After all, housing is almost affordable in most countries, and economic uncertainty has slowed home sales significantly. More sellers are postponing and buyers are stalling the market as they don’t want to spend more and more. It’s no surprise that many people question whether this is the right time to make the leap.
In short, whether it’s a good time to buy a house will be summed up as whether it’s a good time to buy a house. Let’s dig a little deeper into market trends to help you answer, “Should I buy a house now or wait?”
From Redfin’s Chief Economist
“Now is a good time to buy. Prices continue to rise and mortgage rates continue to rise, but stocks are also growing significantly, so there is a bargaining advantage for buyers. But the volatile economy is slowing the market. – Daryl Fairweather, Chief Economist of Redfin.
What Buyers Should Know About the Housing Market
Here we present some important market trends that will help you gain attention and make an informed home buying choice.
House Price: Sky Height and Still Climbing
The median US selling price is $431,000, an increase of 2.5% from a year ago. Home prices have recorded profits compared to the previous year for the 21st consecutive month, 30% higher than in 2020. Monthly housing costs have recently risen to record highs.
Growth has slowed, but prices are expected to continue to rise this year, with more buyers coming to rent.
For those planning to buy, acting earlier than later can help lock your home at a lower price before it becomes even more expensive.
>>Read: Redfin’s 2025 Housing Market Forecast
Mortgage fee: Increased and volatile
As of April 28th, the average daily 30-year fixed mortgage rate is 6.84%. It’s been slightly improved since last week. The bond market, which affects mortgage rates, will return to a more stable state and interest rates will fall. But the turbulent economy puts everything in question.
“Taxes, recession and market turmoil mean that buyers should expect fees to remain volatile for a foreseeable future,” warned Chen Zhao, head of economic research at Redfin. “That being said, amidst this economic uncertainty, even a slight drop in prices is a welcome break for home buyers.”
Redfin predicts that mortgage rates will hover between 6-7% this year. Mortgage rates could rise if the Federal Reserve succumbed to White House pressure and cut interest rates at the next meeting in May.
How does mortgage fees affect housing costs?
Mortgage fees are important for buyers as they are converted directly into monthly home expenses. The higher the rate, the more you pay monthly. If prices drop, you can save tens of thousands of mortgage lifetimes.
Use your mortgage calculator data to see how your monthly payments change at different rates.
Buyers have an advantage
Home inventory is growing in many markets, such as the South, giving buyers more negotiation power. However, in parts of the Midwest, supply is very low, and it takes care of the sellers and pushes prices up.
In general, home sales are slow and the homes aren’t changing their hands. Let’s dig a little deeper into the data and look at two key market metrics.
Stock is the highest in five years
Today, more homes are on sale in the United States than they have since the start of the pandemic. Florida and Texas have the most homes on the market today.
Home inventory is growing as more sellers list their homes. This will keep the homes sitting in the market for a long time. For example, in March, a typical home was on the market for 47 days. This is the longest time since 2019.
Buyers looking to take advantage of this supply bump may be in a better position to negotiate for concessions
Demand is strong depending on where you look
The economy is turbulent, but some buyers still want to enter the market and are increasing prices. Midwest cities like Milwaukee and Detroit see the most price growth as they are in charge of sellers thanks to strong demand for affordable real estate.
But most parts of the country are particularly favoring Austin and Tampa, buyers. Demand is generally declining in these regions and across the nation due to economic uncertainty and high housing costs. For buyers with budgets, this could be a good time to enter the market as sellers could be more open to negotiations.
>>Read: How to Sell Your Home in 2025: A Comprehensive Guide
Inflation could come back
Important to the housing market, the Fed and economists are concerned that inflation will return, which will affect mortgage rates. Furthermore, due to the tariff conundrum, they fear that “stagflation” (a combination of slow growth and increased increase) can be set.
Inflation has a major impact on buyers. Most importantly, it will lead to higher home prices and mortgage rates, and will allow you to further stretch your budget. When inflation backs up, borrowing can be more expensive, making it a wise time to lock the rate before it happens.
All-speed buyers who want to avoid mortgages altogether should now act to avoid potential price increases.
>>Read: Housing Market Under Donald Trump: What It Means for Buyers, Sellers, and Renters
How to Buy an Uncertain Economy
Customs duties, economic whiplash and unstable mortgage rates make many buyers tired of entering the market. Below are some tips from economists on navigating this changing landscape.
Stick to your budget. This is not a time to grow financially. With economic uncertainty rising economic uncertainty with around 50% odds for a recession, make sure you have enough savings to cover your mortgage payments if your income changes. Negotiation, Negotiation: Use leverage as the market prefers buyers. There is more stock and more sales prices are asking. Be smarter about fees: Mortgage charges are unpredictable. If your rate drops significantly after locking in, compare lenders, compare lenders, and ask about the “floatdown” option. You can refinance any time if necessary. Sold before purchasing: If you own a home, consider selling it first. It will give you a clearer budget and help you avoid the risk of carrying two mortgages.
>>Read: How to buy or sell a house amidst economic uncertainty
Personal considerations: Are you ready to buy and own a home?
When deciding whether to buy a home in today’s climate, you want to think beyond the market situation and focus on your individual situation. Here are some personal considerations to keep in mind.
Financial health
Stock your current savings, credit scores and debt levels. Can you afford to buy a house? Or does rental make more sense?
As housing is a long-term commitment, you need a solid emergency fund that ideally covers 3-6 months’ expenses due to maintenance and unexpected costs.
Monthly budget
Decide how mortgage payments at today’s rates will affect your lifestyle. Make sure you are comfortable handling monthly payments, property taxes, insurance and other homeownership expenses.
Work and location stability
If you’re planning on putting it for a few years, buying a home makes sense. A stable job and reliable income are important to avoid financial burdens, especially when housing prices or interest rates rise further.
It is also essential to choose your location. Is your potential home prone to flooding, wildfires, or other climate risks? This is especially important today as insurance companies continue to drop homeowners at an incredible rate.
Personal goals and timeline
Think about life events, such as starting a family, retiring, or moving. These factors can make your home more attractive or potentially at risk if you need to move quickly.
Lifestyle preferences
Homeownership has ongoing responsibility, including maintenance, repairs, and property taxes. Ask yourself if you have time, resources, and desire to handle them.
>>Read: Are you ready to buy a house? 8 questions that will help you decide
So is this a good time to buy a house?
If you have the means and are ready to own a home, now is a good time to buy a home. The rate is lower than last year, but it may not remain that way for a long time due to the uncertainty of the economy. Waiting for prices to drop will intensify competition between buyers and risk subsequent price increases from sellers.
That said, today’s housing market has been Topsitterbee since the pandemic. Low inventory (rising) and high prices created a strange mix. Some homes have jumped out of the market, while others have been sitting for a few weeks. And despite the relatively high mortgage rate, prices continue to rise. This does not even consider potential policy changes.
In this unpredictable market, the best approach is to prepare. Know your budget, get your approval in advance, move quickly if the right home comes.
Final Thoughts
If you’re at the home market and are scared of high prices, now is the time to connect with your agent and start searching for your home. Prices are likely to rise between 6% and 7% until 2025, with buyers still feeling restless and the market gaining momentum. The longer you wait, the more competition will be.
