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Is Now A Good Time To Buy A House? What To Know In 2022

Jamie Johnson4-minute read

April 19, 2022

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According to a recent Fannie Mae survey, many consumers are hesitant to buy a home in 2022. Over 60% of survey respondents expect mortgage rates to increase, and there are rising concerns about job stability and escalating housing prices.

So if you’re hoping to move in the coming year, you may be wondering, “Is it a good time to buy a house?” The reality is, this question is more nuanced than you may think. This article will review some of the primary factors you should consider before buying a home. 

Is It A Good Time To Buy A House?

In reality, there’s never a perfect time to buy a house — it’s challenging any time, even when it’s a buyer’s market. Whether you should buy a home largely depends on your personal situation.

For instance, your budget, the amount you’ve saved for a down payment, and your credit score all play a factor in whether you’re ready to buy a house.

To decide if it’s a good time to buy a house, take a look at your financial situation and the current price of homes in your area. If you have money saved for a down payment and your estimated mortgage payment is the same or less than your monthly rent, buying now may be a good choice.

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Current Market Conditions

The current market conditions are changing, making it easier for some home buyers and harder for others. Here are some of the main factors you need to know about.

Interest Rates Are Going Up

In 2021, interest rates reached historic lows, making buying a home a more attractive option. However, the Federal Reserve is now raising interest rates for the first time in 2 years to help combat inflation.

As a borrower, hearing about higher interest rates is never welcome news — higher rates mean a higher monthly mortgage payment. However, it’s important to keep these rising rates in perspective — it will still be lower than what many borrowers have historically locked in.

Home Prices Will Continue To Rise

The current upward trend of home prices will likely continue to increase throughout the year, which could end up pricing out some home buyers. However, the prices are expected to increase at a slower pace than they did in 2021.

It’s Still A Seller’s Market

There are still fewer homes on the market than buyers looking for properties, making it a seller’s market. But this year, the number of available homes will likely increase, making it easier for buyers to find the home they want.

Homes Are Selling Quickly

For the past few years, homes have been selling very quickly, which impacts potential buyers. For instance, buyers may need to make concessions or offer a higher price to help their offer stand out to sellers. It’s important to look at your budget before you start looking for homes so you’ll know what you can and can’t afford.

Why You Should Buy A Home In 2022

Despite the pessimism some consumers feel, 2022 could be a great year to buy a home. However, it’s a good idea to act quickly while market conditions are still favorable.

For instance, if you get preapproved soon, you can lock in interest rates before they go any higher. You can also get into a home before properties become more expensive.

If nothing else, it’s a good idea to do your research and look into it. After crunching the numbers, you may find that your mortgage payments would cost less than you’re currently paying in rent.

Why Waiting To Buy A House May Be A Good Idea

Of course, buying a house in 2022 won’t be the right choice for everyone. Here are a few factors that may prevent you from buying a home.

We’re In A Seller’s Market

Home buyers have been operating in a strong seller’s market for the past couple of years. This means the demand for homes outpaces the available inventory. As a result, buyers have to compete with one another for the houses that are on the market.

This competition leads to high prices and stiff competition for home buyers. With the general shortage of housing options, some potential home buyers are forced to go above and beyond to obtain a home.

A couple of these strategies include making a larger down payment or providing an all-cash offer. Neither of these is ideal options for buyers, but it could be what it takes to land a home in this hot market.

By waiting to purchase a home, you may be able to enter the market when there are fewer buyers looking or more homes available.

Interest Rates Are Higher

Higher interest rates pose a challenge to existing homeowners looking to buy a new home at the same time as selling their current home. Existing homeowners may have mortgages with lower interest rates than are currently available.

By buying a new home, they risk increasing their monthly expenses significantly. So, if you don’t have a hard date of when you want to buy a new house, waiting until it makes more sense for you financially may be a better option temporarily.

The Bottom Line: The Best Time To Buy A House Is Up To You

There is no one right time to buy a home — the best time to buy a house will vary for every prospective buyer. It’s essential to consider your financial situation and understand how buying will impact your bottom line each month.

If you’re ready to start your home buying journey, be sure to get preapproved with Rocket Mortgage® before you start looking at homes.

 

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Jamie Johnson

Jamie Johnson is a Kansas City-based freelance writer who writes about a variety of personal finance topics, including loans, building credit, and paying down debt. She currently writes for clients like the U.S. Chamber of Commerce, Business Insider, and Bankrate.