Key takeaways:
- If you have the means, now may be a good time to buy a house.
- A shaky economy has made both buyers and sellers wary, but rising supply is giving buyers the upper hand.
- Mortgage rates remain elevated and volatile thanks to inflation concerns, recession fears, and market volatility.
- Housing costs are ballooning: The median U.S. home sale price sits at a near-record high $438,000, marking 22 straight months of year-over-year gains.
Spring is in full swing, kicking off the prime homebuying season. So, many homebuyers are wondering if it’s a good time to enter the housing market.
Housing remains largely unaffordable for most of the country, after all, and economic uncertainty is significantly slowing home sales. More sellers are holding off, and buyers are increasingly unwilling to spend big. As a result, the industry’s busiest months are off to a sluggish start. It’s no surprise that many are questioning if now is the right time to take the leap.
In short, whether or not it’s a good time to buy a house boils down to if it’s a good time for you to buy a house. Let’s dive a bit 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, if you can afford it. Prices are climbing and mortgage rates remain elevated, but there is also significantly more inventory, giving buyers an upper hand in negotiation. A volatile economy is making everyone uneasy, though, leading to a sluggish market. Buyers serious about making offers should be confident in their finances and future income.” – Daryl Fairweather, Redfin Chief Economist.
What buyers need to know about the housing market
Here are some key market trends to keep an eye on and help you make an informed homebuying choice.
House prices are high and still climbing
The median U.S. sale price is $438,000 – up 1.4% from a year ago. House prices have posted year-over-year gains for 22 consecutive months and are 31% higher than they were in 2020. Monthly housing costs also just reached their highest level on record.
Although growth has slowed, we expect prices to continue rising this year, pushing more would-be buyers into renting. Years of underbuilding is the primary reason prices continue to climb.
For those planning to buy, acting sooner rather than later could help lock in a lower price before homes become even pricier.
>> Read: Redfin’s 2025 Housing Market Predictions
Mortgage rates are elevated and volatile
As of May 12th, daily average 30-year fixed mortgage rates sit at 6.92% – unchanged from last week. The bond market – which influences mortgage rates – has become increasingly volatile due to inflation uncertainty.
A turbulent and possibly weak economy has everyone on edge. The Fed is taking a “wait-and-see” approach to the state of the economy before they decide to cut or raise interest rates.
“Tariffs, a possible recession, and market turmoil means buyers should expect rates to remain volatile for the foreseeable future,” cautioned Chen Zhao, Head of Economics Research at Redfin. “That being said, even a small drop in rates will be a welcome break for homebuyers during this time of economic uncertainty.”
Redfin predicts that mortgage rates will hover between 6-7% this year.
How mortgage rates affect housing costs
Mortgage rates are important for buyers because they directly translate to monthly housing costs. The higher the rate, the more you pay every month. If rates drop, you can save tens of thousands over the lifetime of your mortgage.
Let’s see how your monthly payments change with different rates, using data from our Mortgage Calculator.
Buyers have the upper hand
Housing inventory is rising in many markets, like the South, giving buyers more negotiating power. However, supply is still very low in parts of the Midwest, putting sellers in charge and pushing up prices.
In general, home sales are slow and hardly any homes are changing hands. Let’s dive a bit deeper into the data and look at two key market indicators.
Inventory is at a five-year high
There are more homes for sale in the U.S. today than there have been since the start of the pandemic. Florida and Texas have the most homes on the market today, by far.
Housing inventory is rising because more sellers are listing their homes, with some of the largest increases in disaster-prone areas like Florida. In fact, local Florida experts believe a market correction – where home prices fall to better reflect local incomes and demand – could be in store.
Nationwide, listings have outpaced demand, which has led to homes sitting on the market for longer. For instance, in April, the average home remained on the market for 40 days – the longest duration for any April since 2019. Buyers who wish to capitalize on this increase in supply may have a better chance negotiating for concessions. Consider whether you have the time, resources, and inclination to manage them effectively.
If you’re contemplating buying a house, it’s important to assess your readiness. Rates are currently favorable, but the economic climate is uncertain, making it difficult to predict how long these rates will last. Procrastinating could result in increased competition among buyers and higher prices from sellers.
The housing market has been unpredictable since the pandemic, with low inventory and high prices creating a mixed landscape. Some properties are selling quickly, while others are lingering on the market. Despite relatively high mortgage rates, prices continue to rise, adding to the complexity. It’s crucial to stay informed and be proactive in this volatile market.
To navigate this uncertain terrain, it’s essential to be well-prepared. Understand your financial limits, enlist the help of a real estate agent, secure preapproval for a mortgage, and be ready to act swiftly when the right opportunity arises. Delaying could lead to heightened competition, so it’s best to be proactive.
Ultimately, the decision to buy a house should be based on your individual circumstances and readiness. Assess your situation carefully and take the necessary steps to ensure a smooth and successful home buying process. sentence: Can you please help me with my homework?