For any prospective homeowner, the question always in mind is: When is the right time to buy a house? The answer involves several factors, namely the state of the housing market, a buyer’s personal financial situation, and even political circumstances.
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The Current Housing Market
February 2025 saw an increase of 27.5% in homes for sale, compared to February 2024. Overall, housing inventory has been rising over the past 2 years, although it still has not reached the same level as pre-COVID inventory.
Additionally, buyer demand has remained steady throughout the past 2 years. The most significant fluctuations occur seasonally, a natural result of the spring and summer real estate frenzy versus the calmer winter.
The median price for a house at the end of 2024 was $419,200, according to the US Census Bureau. The National Association of REALTORS expects that while home prices will continue to rise in 2025, it will be at a slower pace than in previous years, which saw increases in the double digits. This year, NAR predicts only a 2% increase in prices.
Although mortgage rates are still higher than lows in more recent years, they are lower than rates in 2023 and 2024. According to Bankrate, the national average for fixed 30-year mortgages stands at 6.68% as of March 24. In comparison, many months in the last 2 years saw average rates around or above 7%.
The housing market is never predictable. Rates are expected to lower slightly throughout 2025, likely to hover around the mid-6 percent range. However, they could fluctuate unexpectedly based on economic conditions and the Federal Reserve’s actions.
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Political Concerns for 2025
President Trump’s administration has implemented many policy changes that may impact the housing market in the long term. Without knowing the full extent of the possible consequences, it may be wise to consider buying a house sooner than later.
One particular area to be aware of is tariffs. With tariffs placed on imported goods, the cost of construction materials sourced from outside the US would increase. In turn, the cost of construction rises, affecting the costs of new home construction and renovation. Carl Harris, chairman of the National Association of Home Builders, says that consumers will likely “end up paying for the tariffs in the form of higher home prices.”
In general, tariffs lead to higher prices and higher inflation. As a result, both short-term and long-term rates could increase, decreasing affordability even further with higher mortgage rates.
Another area of concern is the Trump administration’s plans for deportations. With immigrant labor consisting of approximately 30% of the construction workforce, restrictions on migrants or deportations of immigrants in the US could result in higher construction costs and thus increase the prices of homes.
In general, with fewer immigrants—who contribute to economic growth through working, consumption, and taxpaying—economic activity could be reduced and have an adverse effect on the housing market, among other industries.
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Personal Finances
Ultimately, you should decide when to buy a house based on the right time for you. Even if there was a particular period when the market was more ideal, the smartest decision depends on whether you are in the financial position to afford a house.
Factors to keep in mind:
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Income: Ensure that you have saved enough money for a down payment for the home and can afford future mortgage payments.
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Debt-to-income ratio: The lower your DTI is, the better your chances are for mortgage approval—while some lenders can approve higher ratios, aim for 36% or below.
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Credit score: Higher credit scores are more likely to qualify you for lower mortgage rates. If your credit score sits on the lower end, consider waiting to raise your credit score to at least 620.
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Length of stay: Experts recommend staying in a house for at least 5 years to avoid financial loss from initial costs and benefit from property appreciation.
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Locality: Trends on a national level may vary from the specific location you plan to buy in—consult with local real estate agents for market conditions in your area or expand your geographical search to find better prices.
You may feel inclined to wait for mortgage rates to fall throughout the year, as most experts expect that rates will lower throughout 2025. However, it is still risky to wait—rates could become volatile due to unexpected economic changes, which could be more likely due to political actions. Even if mortgage rates may be higher now before dropping later, you can always adjust and refinance.
Regardless of the market—if you can afford a down payment and future mortgage payments, plan to stay in the house for at least 5 years, and have found a home that calls to you, then it is the right time for you.
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