Before pulling the trigger on buying your house, you need to consider the case for buying now versus waiting for conditions to improve. In today’s housing market, which is characterized by a “locked-in” effect where many existing homeowners with low mortgage rates are reluctant to sell, there is a strong case for either side of the argument.
Here’s why you should consider buying a house this year:
Mortgage Rates Are Stabilizing, But Remain Elevated: It’s not just the price of the home that will affect affordability; mortgage terms will also affect your monthly payments. While the days of historically low sub-5% rates are in the past, a stabilization in mortgage rates in the mid-6% range could provide some clarity for buyers. As of early September 2025, the average 30-year fixed-rate mortgage is around 6.5%. While this is higher than a year ago, it’s a slight decrease from recent highs, which could be a sign of a more stable environment.
Increased Inventory in Some Markets: In some areas, particularly in the South and West, inventory is increasing. This gives buyers more choices and can lead to less competition. While national inventory remains below pre-pandemic levels, a rise in active listings in certain metros means that buyers are gaining more bargaining power and a better selection of properties, from new homes to existing ones.
Builders Are Still Offering Incentives: Homebuilders are continuing to offer aggressive pricing and incentives to attract buyers. If you’re considering a new-construction home, builders are still offering steep discounts, and a new home also comes with a home warranty on the house and its appliances. New-construction inventory, in particular, is at its highest level in years, providing a wider range of options for those willing to consider it.
Affordability is a Mixed Bag: The National Association of Realtors’ Housing Affordability Index shows that a typical family needs to spend a significant portion of their income on mortgage payments. However, affordability is highly dependent on location. While the national median home price has seen a modest year-over-year increase, some metro areas are experiencing price declines. Always talk to local agents and recent buyers to really determine housing and price trends in your area, as opposed to relying solely on national indicators.
The above presents a pretty strong case for buying a home in the year ahead. However, given the potential for adverse economic conditions and because this will probably be your biggest investment in life, you need to look at the other side of the buy argument and consider why it may not be such a good idea. Here are some reasons that could stall your decision to become a homeowner:
Prices Are Unpredictable: While some national forecasts suggest a modest increase in home prices, other major forecasters, like Zillow, are predicting a slight national decline in the coming year. Prices are still dropping in some markets, and even if they stabilize, a “flat-line” recovery is possible, meaning price appreciation will be weak for a while. If you buy today, your home could be worth less in a year or even two, making it harder to build equity.
The “Locked-In” Market Restricts Inventory: While new construction and certain regions have seen inventory gains, the overall market for existing homes remains tight. Many homeowners with low, pre-2022 mortgage rates are choosing not to sell because they would have to finance a new home at a much higher rate. This “lock-in” effect is a primary factor keeping a lid on the supply of existing homes for sale, which can still lead to bidding wars and higher prices in desirable areas.
Job Market Uncertainty: While overall employment is still growing, the pace has slowed, and certain sectors are experiencing job cuts. The labor market has been showing signs of softening, and it’s crucial to assess your own job security. If you are worried about your job, it’s wise to build up your financial reserves rather than tying up a significant portion of your capital in a home.
Negative Equity is a Risk: Given the potential for flat or declining home prices, you might have to stay in your home for longer than you thought for the investment to make financial sense. If prices continue to drop, you could find yourself in a negative equity situation, where you owe more on your mortgage than the house is worth.
Your Cash Reserves Will Be Eaten Up: Even if you feel confident about your job, it’s wise to have a cushion to land on in the event of a financial setback. A down payment and closing costs can deplete your rainy day fund. It is much smarter to have an emergency fund of at least five or six months of living expenses, because you never know what lies ahead.
Overall, there is no “right” time to buy. No one can predict the future with certainty. In reality, buying a house is a very personal decision for every family based on many factors. It will also vary state by state, given the localized nature of the housing market.
For me, I would need more space for an expanding family, be planning to stay in my current location for a while, and, most importantly, have sufficient funds for a healthy deposit while still having emergency funds set aside. But I would not rush into anything and would only buy when I find the right house at the right price.