Buying a home is one of the most significant financial decisions most people will make, whether you’re a first-time buyer or considering upgrading or downsizing. With fluctuating mortgage rates, evolving economic conditions, and personal financial factors to consider, many prospective buyers wonder: Is now a good time to buy a home? Here are a few things to consider to help you decide.
A fluctuating stock market, talk of recession, and tariffs all go into deciding whether to buy or not more complicated, even before you consider the housing market on its own. According to Zillow, the average home value in the U.S. is $367,711, up 1.4% year over year as of this writing.* In April, the 30-year conventional mortgage rate averaged 6.92%, a bit higher than the previous month.**
Housing availability is improving. The number of active listings rose to 30.6% in April. However, they still lag behind normal levels before the start of COVID-19.†
If mortgage rates stay as they are, your monthly payments could be significantly more than with lower rates — even if home prices remain the same. However, with more homes on the market, sellers may be more willing to negotiate, offering discounts or incentives. Will the Federal Reserve lower rates? Fed officials see the Fed funds rate falling to 3.9% this year. And there could be additional cuts in 2026.†† Remember, what the Fed does and doesn’t do isn’t guaranteed; they are looking at the economy as a whole, not just the housing market.
On the flip side, in a hot market with limited inventory, you may find yourself in bidding wars, often paying over the asking price. If the market seems overheated, it may be wise to wait for it to stabilize. Watch indicators such as average days homes have been on the market, price reductions, and housing supply to determine whether the market favors buyers or sellers.
Assess your financial readiness.
While market conditions are important, your financial situation is arguably even more critical. Start by asking yourself:
- Do I have a stable income?
- Have I saved enough for a down payment and closing costs?
- Is my credit score healthy enough to qualify for a favorable loan?
- Can I comfortably afford the monthly mortgage, taxes, insurance, and maintenance?
- Will I be able to continue to save money and build an emergency fund?
If you can confidently say yes to these questions, you may be more ready than you think — regardless of what the broader market is doing. If you’re not sure of your credit score, find out. You’re entitled by federal law to free copies of your credit reports from the three major bureaus every year. If you find errors in your report, take steps to correct them as soon as possible; it can take months to fix the errors. Many of these mistakes are minor, but some could cost you a lot of money in the form of higher interest rates or even cause you to be denied credit. While getting your credit files every year is smart, we suggest you review your credit score monthly. It’s easy to do and free with our Credit Score Tool in Tulee, our digital banking platform. Checking your score in Tulee has no impact on your credit report.
Think long-term.
Buying a home is not just about timing the market — it’s about your long-term goals – and if you’re buying a home with a partner, be sure your goals are aligned. If you plan to live in the home for five to ten years or more, short-term market fluctuations become less important. Real estate historically appreciates over time, so long-term ownership can help smooth out the effects of economic cycles.
Additionally, consider lifestyle factors. Are you ready to settle in one location? Do you need more space for a growing family? Is it time to downsize to cut costs and simplify your life? Are you tired of rising rent prices and want to build equity? These questions are just as important as interest rates and market trends.
Consider your job sector. Is it growing or contracting? How will artificial intelligence (AI) impact your job?
Final thoughts.
Waiting for the “perfect” time to buy can lead to analysis paralysis. Real estate markets can be unpredictable, and trying to time the bottom or top is extremely difficult. Instead, focus on making a sound financial decision that fits your life and long-term goals. Working with a knowledgeable real estate agent and mortgage advisor can help you navigate the nuances and make a confident choice.
When you decide it’s the right time to buy, we can help. We offer competitive mortgage rates, and our mortgage professionals are committed to making the buying process go smoothly. We offer conventional, jumbo, and high-balance loans. And the FIGFCU Home Rewards program can help you find a home and save money. If you’re buying, you can get a 20% realtor commission rebate, which can save you thousands on your purchase. If you’re selling, the 1.5% listing fee can save you big money you can use to help pay moving expenses, home repairs, or improvements.
Is now a good time to buy a home? Ultimately, that’s up to you. We hope the above ideas make your decision-making process easier.
*Zillow, “What is the Zillow Home Values Index?” Zillow.com. Accessed 27 May 2025.
**Flannagan, Glen Luke, “Current mortgage rates report for May 26, 2025: Rates hold steady after recent increase.” Fortune.com. 26 May 2025. Accessed 27 May 2025
†Centopani, Paul, “Time to negotiate? Home price reductions and for-sale inventory grow in April,” TheMortgageReports. 19 May 2025. Accessed 27 May 2025.
††Canal, Alexandra, “Fed sees 2 rate cuts in 2025, projects higher inflation and lower economic growth.” Yahoo.com. 19 March 2025. Accessed 16 April 2025