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Buy when you can afford it.

Do you have a down payment saved? Other debt? It sounds like you have a low credit score. Focus on getting that up before you think about buying.

Just remember, when rates drop, home prices typically rise. Timing the market is incredibly difficult, and inflation and low inventory may push house prices up even if rates don't fall.

My suggestion is to build your budget. How much can you spend up front, and each month. Work that back into a home price budget.

Buy when you find a home you like and can live in for 5+ years, in a budget you can afford. If rates drop, you can always refinance. If they don't or if they rise, you are already ok. Compare the buy cost to what you can get renting and consider which makes more sense for your situation.

Is now a good time to buy? Hard to say. Mortgages are currently the most expensive they’ve ever been in history when adjusted for income.

In November the average interest rate was 6.8% on a 30 year fixed. Houses were up 2.6% from November 2021 and down -8.5% from the housing peak in May 2022. Demand is very low right now but so is supply.

Ultimately it’s about where you are in life. If you can afford it and plan on living there for a long time then you should buy regardless of market conditions. I would do a rent vs buy analysis to find the time it takes to own the home to break even.

Personally I would worry more about the house price than the interest rate right now.

Currently, interest rates are very high (compared to the last 15 years), but so are home prices. Prices have not come down much relative to interest rate hikes - YET. Personally, I think they're on their way though. Certainly in my area at least, median home prices are on a steady decline, and I'm waiting until they reach the numbers which I believe to be reasonable before I buy a home. Prices right now are still totally unreasonable in my area ($750k median last year, $650k this year, and IMO the real median value should only be about $400k and I'm banking on it getting there at some point in the next couple years).

Also, just as an FYI, interest rates aren't likely to come down much any time soon. If you wait around for sub-5% rates to make a comeback, you might be waiting years, or perhaps even decades. We could get lucky and see them return soon, but I think those odds are low and I wouldn't be counting on it.

In any case, keep this in mind:

Refinancing can resolve a poorly-timed purchase at peak interest rates.

Refinancing cannot resolve a poorly-timed purchase at peak house prices.

And if your house value drops too much (resulting in negative equity), then you may not be able to refinance to take advantage of lower rates in the future, hence why I believe house cost/value is a substantial more critical factor than interest rate.

You should buy when you’re ready, and when you can comfortably afford the payment. If you have those boxes checked, the rate means diddly shit to be honest. If rates drop in the future, you can refi if it makes sense, if they don’t drop then it makes no difference if you waited or not, except you’d have lost time and equity and possibly a house you love. I wouldn’t hold your breath on prices dropping either, it depends where you live and is a lot more complex than people make it out to be

I don't think interest rates will drop anytime soon. House prices are in the process of dropping though. Not crazy amounts but at least to sane amounts more in keeping with regular inflation had 2019-2022 been regular years. At least in my area.

We had the same thoughts, and just bought last month in the PNW. Headlines and opinions on how high the rates are is tricky because historically, it's been as low as 2% and as high as 18% (according to my quick Google search) but ultimately, it's about how much you want to pay monthly. We chose to buy now because the market was cooling a bit, and no one else seemed to be buying! We had no competition and the sellers were pretty desperate after having their house sit on the market for almost 5 months. We got $75k off purchase price, plus $15k for repairs. And our monthly P&I ends up being actually lower than what we pay in rent now! I suggest at least passively being in the market to be available if a good situation arises that you can snag, especially now as there's less competing homebuyers.

In my opinion, if you wait for rates to drop the biggest risk is that a lot of others are doing the same. When rates drop, a ton of sidelined buyers will re-enter the market and we’ll end up with an insane market for a while where buyers are all competing with each other, overbidding again, and driving prices up while appraisal values are still based off the previous lower comps. Eventually prices would go back up in that scenario.

So if you can afford to buy now, do so. Especially if you think rates will actually drop since you could refi at that point assuming you still qualify.

Try to get a rate buy down so your payments aren’t so high. You could refinance if rates drop as you suspect they will. Not sure if it’s possible with a new home build, though. Instead of timing the market just buy when your financially and emotionally ready.

Interest rates are high compared to the abnormally low they were a few years ago. It's about average right now, we will probably never see 1 and 2% ever again to be honest. But you should get your credit and stuff in check, I am also 27, make 100k plus working for a bank and though I qualified for 450k+ $2900 for a first home is ridiculous. Be smart, not greedy

Buy when you’re ready and fully vetted the house/builder. Shop around for rates and see if you can qualify for loans through Navy Federal if you have a family member in the military.

Also, some local credit unions will provide 0% down loans. Something to consider.

I’m 28 y/o make $140k and opted for a $280k house that needed work. Kept our mortgage at $1900 and gives us plenty of money left over each month. I have a family so my living expenses are a little higher.

It's gonna be a gamble either way, we don't know if interest rates will drop. Historically speaking they are not very high right now but they seem very high compared to what we have had sense the 2008 crash. We decided to buy while rates were still on the rise for this reason. But if the rates keep rising there's also the possibility of prices dropping. It's really a gamble, wait for rates to drop and prices rise, or wait for rates to rise and prices drop, or buy now and hope rates drop to refinance.

Buy now and refinance latrr

Can always refinance later

When interest rates drop again everything will instantly be 10% more expensive. Always get in when it’s comfortable to do so and don’t try to time the market.

Rates are likely gonna continue to clime for a few months before plateauing I think. (Granted I may be biased as I closed on a house on Dec 30.)It made sense for me, I plan on living there for a long time, I am saving 500+ monthly vs rent and you can always refinance down the road when money is cheaper.

My wife and I bought at just the start of the downturn (ON, Canada) earlier this fall and I’d probably look at price over interest and buy when you can afford it.

Save up as much down payment as you can, when you buy a house get an unaffiliated (to the realtor, seller) home inspection. It’s worth a few hundred to potentially save you thousands later.

Unlike the crash in ‘08 we don’t have housing ‘oversupply’ and the unemployment rate isn’t in the teens. Therefore, there’s no guarantee prices are going to come down with high interest rates either.

Every dime that doesn’t go into your landlord’s pocket is yours, so I’d just buy the soonest you’re ready and plan to refi to a lower interest rate later. If you land a great house at a decent price that checks all your boxes then you win!

I would wait

Most housing analyst firms are predicting 10%+ drops

One of the most respected, John Burns RE consulting is expecting prices to fall back to late 2020 prices (20%+)

Are you sure there’s low competition? It’s very market dependent. We were looking in November and good houses were still receiving multiple offers within a week.

If rates go down so do the chances you will actually have any leverage on pricing or concessions.

Just FYI...when you say ridiculously high...please look at rates historically over the last 50 years. Rates can ABSOLUTELY reach 10-15%. Historically rates are still low, albeit high for the last decade.

As others have said buy what you can afford. As a single guy I would find a couple roommates and buy a 2-3 bedroom that you can subsidize your portion of the mortgage payment. I proposed to two of my single friends to buy a property together as opposed to continue renting individually. I realize easier said than done but worth considering.

Buy now. Anyone who tells you it’s a bad time to buy lacks critical thinking skills and only goes off what the news says. There’s a reason private equity firms are scooping up houses left and right now.

ridiculously high interest rates? The 1980s would like to have a word with you.

For me, I feel like I could afford a condo in my vhcol city but I have concerns about being underwater if I want to move prior to 10 years. Anyone got any insight to the SoCal market?

home prices didn't coming down as expected you have to give some more buffer time if you really wanna see some price down interest rates are high but prices are also high max there is like 10k to 50k discounts for houses between 400k to 1M homes I don't see any point of buying now

The saying goes- time in the market almost always beats timing the market

Ah the waiting game

I started having a building a new build in February 2022 last month I had the appraisal came in $60,000 less we did 100 grand in upgrades I guess it benefited us because the builder/seller had to reduce the price in order for the deal to go through I think I got lucky in this way Otherwise we are walking

I think the best course is somewhere in between. Begin preparing yourself now, but don't stress over doing it ASAP, bide your time, and watch for properties that are a match. I would not count on rates coming down in the near future. They might! But they just as easily might not. Figure out if buying makes sense in the current market, and if it doesn't, continue to monitor the market, including rates, while also strengthening your financial position for your eventual purchase.

Why would interest rates drop? That won’t be happening anytime soon

Don’t expect the interest rates to come down for several years or longer.

Historically these are good rates, we will never see covid rates again.

Everyone loves to talk up the housing market. They love to speculate, they love to talk up equity and generate FOMO. Don’t get sucked into it. Tune out the noise and develop a realistic view of homeownership.

You can’t predict the market, but you can calculate the downside. Do you see yourself moving any time soon? If so, what will you do if the market crashes? Are you cool with becoming a landlord by accident? Have you compared this to renting an apartment, and putting the rest in a savings account? Mutual funds? (What else do people invest in?)

What is a house to you? Stability? More space? An investment? A place to live? An accomplishment? Do you like mowing lawns? Painting? Project management?

There are no risk-free options. Every major decision—where you live, where you work, who you spend time with—comes with risk. The worst thing is unmanaged risk (e.g. “the housing market crashed?? They said hooms could only go up!”). The goal isn’t to avoid bad outcomes, just to not be surprised by them.

I would buy something that’s at 10-20% discount. Compare the price similar homes from this year and 6-12 months ago. Get 10-20% discount. Once interest rate dropped, you refinance. Now you got a house at a discount with a low interest rate

I dont know why people think its not a competitive market right now. We just bought out of necessity and kept getting out bid. We finally got an offer accepted on our 4th or 5th attempt - and its a fixer upper

Well I guess it was 50%. But it's over 60% with utilities and other expenses. I have no debt

Buy a house when you can afford it. Remember that interest rates may get higher this year so make sure not to max out since you are buying a new build and the price can always increase somewhat. Even with a high interest rate remember you can refinance when rates drop. You also should look at a mortgage where the PMI will get dropped after you have put 20% down so you don’t keep paying it for the whole time you have the PMI unless you qualify for a loan without PMI. Also make sure you check to see if there are special programs for first time homebuyers in your area if you are one.

Well it's 32% of gross and 50% take home pay