Should You Buy a Home Now or Wait? A Guide for New Buyers

Determining when to purchase your first home is one of the largest financial decisions that you will ever make. With increasing home prices, variable interest rates and no clear forecast for the market, it’s common to ask the question: “Should I buy now or wait?”

The reality is, there isn’t one size that fits all. As with any other financial decision, the best time to buy a home is when you’re good and ready. This guide will help you navigate the key things to know so you can make the best decision for your specific situation.

1. Evaluate Your Financial Readiness

Before diving into market dynamics, ask yourself: Am I ready to buy a home financially? Consider:

• Down Payment Savings: Have you already saved enough for a down payment (and closing costs and an emergency cushion)?
• Credit Score: The better the credit score, the lower the mortgage rate and long-term savings.
• Debt-to-Income Ratio (DTI): Most lenders like to see a DTI no higher than 43%.

Job Stability: Consistent income can mean an easier time qualifying for — and paying a mortgage.

If you are financially solvent, you could be prepared now. If that’s not the case, consider holding off on a stronger-than-necessary financial position so you can succeed at some point in the future.

2. Consider Current Interest Rates

Home affordability is greatly influenced by mortgage interest rates. It can make or break your budget: A slight difference in interest rates could shift a monthly payment by hundreds of dollars.

• If rates are relatively low: Purchasing earlier can secure a better rate.
• If rates are high and likely to go down: Waiting could lower your long-term costs.

It’s worth remembering, however, that nobody can predict rates with precision. Some buyers opt to purchase now and refinance if rates fall.

3. Factor in Home Prices

Home prices fluctuate depending on where you live and market conditions.

• In competitive markets, sitting on the sidelines may mean paying even more later, as prices tick ever higher.
• In cooling markets, prices might hold steady or even crawl downward, giving buyers more bargaining leverage.

Look up some local market data, or reach out to a real estate agent, to see what’s trending in your market.

4. Think About Your Personal Timeline

Ask yourself: What am I looking for in a home right now? Common reasons include:

• Wanting stability after renting
• For family or work-from-home needs A desire for more space
• Will stay in the same location for a few years

If you anticipate staying at your destination for a minimum of 5–7 years, buying now can be a great idea. If the stability of your future is less clear — think, for instance, that you may have to relocate for a job in a few years – renting may prove safer for now.

5. Understand the Trade-Offs

Here’s the reality:

• Purchasing now: You begin to build equity right away, but could incur higher costs if rates or prices are high.
• Waiting You might be able to save more money or buy at a better time, but you may miss out if prices and rates rise even further.

Both aren’t ideal — it’s a matter of which is best for your wallet and lifestyle at this point.

6. What to Do if You Decide to Buy Now

If you believe now that it is time to buy, here are ways to maximize your position:

• Get pre-approved (That way, you know how much house you can afford.)
• Familiarize yourself with variety of loan programs (FHA, VA, USDA, conventional).
• Negotiate with sellers for concessions, such as paying a portion of your closing costs.
• You can also think about owning a smaller or “starter” home if prices are high in your location.

7. Tactics If You Decide to Wait

If patience does seem like the more prudent course, spend your time wisely.

• Save hard for a better down payment.
• In the future, when you need a better rate, work on your credit score.
• Research neighborhoods and market conditions.
• Use their funds to pay down liabilities and make yourself more financially sound.

The choice to make a purchase now or hold off depends on finding the right balance between financial preparedness and market conditions. No one can perfectly predict the housing market, but you can control your own readiness.

At Monalending, we assist first-time buyers in comparing their options while finding them a great path forward. You may be ready to buy today, or just preparing for the future. Either way we will work with you to understand your dreams and find a plan that fits your lifestyle, goals and budget.