How to know when to buy a house

This article is for informational purposes only and is not intended to provide, and should not be relied on for, medical, legal, financial, or tax advice. You should consult with a qualified professional for advice specific to your situation. Consumers should independently verify that any services, products, or programs referenced meet their needs and comply with applicable requirements.

Buying a home is a major financial decision, which means figuring out exactly when to buy a house is incredibly important. Before jumping in, the average buyer needs to consider a few critical factors, such as whether their credit can stand up to lender scrutiny and if they have enough income history to qualify for a loan.

Everyone’s situation is different, but there are some general indicators that show you may be ready to buy a home.

Key takeaways:

• A strong financial foundation is essential. Make sure your debt is manageable, your income is reliable, and your credit score meets lender requirements.
• The housing market plays a big role. Keeping an eye on local real estate trends and inventory can give you the negotiating power you need.
• Homeownership goes beyond the monthly payment. You'll need to consider long-term lifestyle stability as well as the added costs of taxes, insurance, and routine maintenance.

Consider the housing market before you buy

Understanding the current housing market can help you make a more informed decision about when to buy. Looking at housing market indicators gives you a clearer picture of what you might face.

According to the Redfin Data Center, the average price of a home is up $4,000 from February 2025 to February 2026.¹ While home prices have trended up nationwide since 2023, they do follow seasonal ups and downs. While every market is different, we could see prices rise throughout the spring and summer purchase season while dipping in the fall and winter.

The average number of days homes were on the market in February was 66, up 8 days from the same time a year ago. The longer a home stays on the market, the more negotiating power a home buyer may have.

Inventory remains extremely tight. Redfin data is a good proxy for existing home inventory where supply is 3.9 months based on the current pace of the sales. Traditionally, roughly 6 months’ supply indicates a market in balance, so things are tilted toward sellers.

There’s more inventory when it comes to new homes at 9.7 months, according to a joint report of the U.S. Department of Housing and Urban Development and the Census Bureau. Because new construction is often more expensive, most home sales are existing inventory.

It’s important to consider the market because navigating a seller's market carries specific perils. For instance, you risk overpaying for a home or having to make snap decisions with limited options.

Keeping close track of prices for the types of home you want to look at can help you make a competitive offer without essentially bidding against yourself and paying more than you need to.

7 signs you’re ready to buy a house

Do you think you’re ready to buy a home? Check for these signs in your life to determine when you should buy a house.

1. You’re in a buyer’s housing market

A buyer’s market occurs when there are more homes for sale than there are buyers actively looking. This shift in supply and demand puts potential buyers in a position to negotiate better prices, request seller concessions, and secure favorable terms.

Homes in a buyer’s market tend to stay on the market longer, and sellers may be open to price reductions or closing cost assistance to sell the property.

Local conditions may vary, but nationally, market conditions are showing subtle signs of tipping in buyers’ favor. Mortgage rates have dipped slightly since last year, and home price growth is beginning to cool. If you’re noticing properties in your area sitting longer or prices being adjusted downward, those are strong indicators that you could have more leverage as a buyer.

2. Your debt is under control

You might have some sort of debt, whether it’s student loans, credit card debt, or something else. Debt can prevent you from being able to save money, have a good credit score, and acquire a low debt-to-income ratio. However, if you’re well on your way to becoming debt-free, it might be a good time to think about buying a home.

Any extra cash flow you can use to spend on a home rather than on debt might be an easy revenue source to save for a down payment.

3. You have a good credit score

To maintain a high credit score, it's important to pay on time and have some credit with longevity. While student and auto loans have an impact on your credit, your budget may make paying these off quickly more difficult.

What you can try to control is the amount put on credit cards. Credit bureaus like to see that you use no more than 30% of your total credit card balances.

Conventional loan credit restrictions have been loosened as of November 2025. Now, lenders will consider a more comprehensive look at your credit and financial profile.

The VA similarly has no minimum credit score, but lenders can set their own. The Rocket Mortgage requirement is 580 or higher.²

The FHA has a 500 minimum credit score with a 10% down payment.³ But you can get a loan with 3.5% down if your score is 580 or better. Regardless of your down payment, Rocket Mortgage requires a 580 credit score.⁴

Beyond qualification, higher credit scores are one of the factors that will tend to lead to lower interest rates.

4. You have money for a down payment

Contrary to popular belief, you don’t need a 20% down payment to buy a home. It’s possible to buy a home with as little as 3% down on a conventional loan or 3.5% down on a Federal Housing Administration loan.

You might even be able to qualify for a Veterans Affairs loan or a U.S. Department of Agriculture loan with no down payment at all. Rocket Mortgage doesn’t offer USDA loans at this time.

A 20% down payment will allow you to avoid paying for private mortgage insurance. PMI protects your lender if you default on your loan. Most lenders require that you pay PMI if you don’t put 20% down on your loan. You can save thousands of dollars in insurance costs over time with a solid down payment.

5. You have a reliable source of income

While there isn’t a specific minimum income needed to buy a house, there are ways to gauge whether you might have enough cash flow to get a loan. One way is to calculate your debt-to-income ratio (DTI). Lenders use this to determine whether borrowers are reasonably able to take on more debt.

Although there isn’t a set amount of income needed for a mortgage, you need enough to meet the DTI requirements based on your loan product. Typically, most borrowers can be approved with a DTI below 43%.

6. You’re looking for a commitment

Buying a house is a big commitment, and most mortgages last 15 – 30 years. You don’t need to stay in your home for that long, but you should still be sure that you’re ready for a potentially long financial commitment.

Don’t know where your career is going? Think you might want to move to a new city? Is your income a little unsteady? You might not be ready to buy a home. But if you think you might want to settle down, start a family, or stay in one place for at least a few years, buying a home might be a smart move.

Buying a home is a risk if you plan to move soon. For instance, if the market shifts and you haven’t built a lot of equity yet, you could be forced to take a loss when you sell.

7. You’ve considered all the costs of homeownership

The true cost of homeownership goes far beyond your monthly payment. Some of the other costs of owning a home include:

• Insurance: Unlike car insurance, you’re not legally required to carry homeowners insurance when you own a home. However, mortgage lenders require you to have adequate insurance as a condition of your loan.
• Property taxes: You must pay property taxes no matter where you live. Property taxes go to local governments and pay for things like fire departments, public schools, and libraries. Local governments calculate property taxes as a percentage of your home’s value. The more your home is worth, the more you’ll pay.
• Closing costs: Closing costs are a one-time expense you pay to close on your loan. Your closing costs may include things like title insurance, attorney fees, lender fees, and more. You can expect to pay 3% – 6% of your purchase price in closing costs.
• Utilities: Your landlord might cover some of your utility costs when you live in an apartment or a rented home. But when you own a home, you need to make sure you can take care of your own water, electricity, trash collection, and sewage bills each month.
• Maintenance: You also need to make sure you can cover both your ongoing maintenance costs and repairs. Note that repair costs on an older home can take up a significant percentage of your monthly budget.

4 signs you’re not ready to buy a house

It’s important to know when it’s a good time to buy a house – and when it’s not. If any of the following apply to you, it might be wise to stick with your current living situation for now.

1. You don’t have an emergency fund

You’re responsible for fixing anything that breaks down when you own your home. If you don’t have an emergency fund, you may quickly find yourself struggling with debt. Ideally, you should have an emergency fund that covers at least 3 months’ worth of living expenses before you think about getting a mortgage.

2. You have a lot of debt

You don’t need to be debt-free to buy a home, but too much debt can make it more difficult to get approved for a loan. More debt can also make your loan more expensive because you’ll be less likely to get the best mortgage rates.

Create a plan to pay down your debts before you take on a monthly mortgage payment and all the other expenses of homeownership.

3. Your income isn’t stable

Career stability means you can anticipate how much money you’ll have coming in every month. That usually means being at the same job for at least 2 years with no immediate plans to quit.

With a steady income, you’ll also be able to get a more accurate idea of how much home you can afford. If you just started your job or you’re thinking about making a career switch soon, you might not be ready to buy a home.

4. You don’t want to be responsible for maintenance

Owning a home comes with many benefits, but it also means taking on the responsibility of ongoing maintenance. If the thought of handling repairs or coordinating with contractors feels overwhelming, renting might be a better fit for your lifestyle.

Landlords are typically responsible for major issues like plumbing problems, roof damage, or a broken furnace – expenses that can add up quickly for homeowners. Renting can offer peace of mind by removing the financial and logistical burden of unexpected repairs.

Ready to buy a home? FAQ

Let’s look at a few of the most common questions first-time home buyers have.

How much money should I save before buying a house?

This is dependent on your personal financial situation. Ideally, you should have an emergency fund that covers at least 3 months’ worth of living expenses before you decide to move forward. Some lenders allow for a down payment as little as 3%. Closing costs are typically 3% – 6% of the purchase price.

How long does it take to buy a house?

The amount of time it takes to buy a house is different for everyone. Typically, the longest part of the process is shopping for a home, touring properties, and deciding on the right one for you. Working with a real estate agent and knowing what you want and need in a property can help you find a home a little faster.

How do I get ready to buy a house?

• Get a preapproval to determine how much you can afford. Compare different lenders because they’ll have different products and risk tolerance that can impact the deal you get. Getting a preapproval can show sellers and their real estate agents to take your offer seriously because you’ve got your financing in order.
• Create a list of home features broken down by needs, wants, and nice-to-haves.
• Understand what’s happening in your local housing market.
• A real estate agent can help find houses in your price range that meet your criteria. When you’ve found the right one, they can help you craft the offer and hammer out a purchase agreement.

How much should I spend on a house?

When deciding how much you should spend on a house, you’ll want to consider factors such as:

• DTI
• Monthly mortgage payment amount
• Expenses of homeownership
• Your household budget

You may want to consult a licensed financial expert before making this or any other major financial decision.

The bottom line: Consider your finances and stability before you buy

Determining when to buy a house requires taking a close look at both your financial health and your long-term stability. You'll want to ensure your credit score is solid, your debt is under control, and you have enough money saved for a down payment and unexpected emergencies.

It's also vital to consider whether your career and lifestyle are steady enough to support the extended commitment of a mortgage. By taking the time to review all these factors alongside the current market, you can step into homeownership with confidence. If you're ready, you can take the next step and apply online.

¹ Rocket Mortgage is an affiliate of Redfin. You aren't required to use its lending services. Learn more at redfin.com/afba.

² Rocket Mortgage is a VA-approved lender, not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.

³ Rocket Mortgage is not acting on behalf of FHA or HUD.

⁴ To qualify for this offer, you must meet all standard FHA eligibility requirements. In addition, your total mortgage payment, including taxes and insurance, cannot exceed 38% of your income, your debt-to-income (DTI) ratio cannot exceed 45%, and you must have 12 months of verifiable housing history immediately prior to your application, no late payments 30 days or greater in the last 12-months, and no derogatory marks on your credit report. Not available on jumbo loans. Asset statements may be needed, no more than 1 day of non-sufficient fund fees are allowed in the most recent 2 months prior to application. Additional restrictions/conditions may apply.

This article is for informational purposes only and is not intended to provide financial, investment, or tax advice. You should consult a qualified financial or tax professional before making decisions regarding your retirement funds or mortgage.

Rocket Mortgage and Redfin are trademarks or service marks of Rocket Mortgage LLC or its affiliates.