“Is now the right time to buy a house?” has no universal answer, and anyone who tells you otherwise is selling something. What you can do is answer it for your own situation, with your own numbers, in about ninety minutes. Here is the exact process I would walk a friend through, with real figures so you can see how the math actually behaves.
Step 1: Price the House You’d Actually Buy
Start with the specific house, not the maximum you were pre-approved for. Lenders qualify you on debt-to-income ratios, not on whether you will still enjoy the payment in February.
Take Marcus and Dana, a Columbus couple earning $135,000 combined. Their lender pre-approved them for $520,000. The house they actually want, a 1,600 square foot three-bed near a decent school, lists at $400,000. That $120,000 gap is the most important number in this whole exercise, because it changes what the word affordable means.
Write down three things: the purchase price you are genuinely targeting, the neighbourhood, and the monthly payment you would be comfortable with. Comfortable, not merely able to tolerate.
Step 2: Add the Costs That Never Appear in the Listing
On a $400,000 purchase with 10% down, you are borrowing $360,000. At 6.75% over 30 years, principal and interest come to roughly $2,335 a month. That is the number everyone quotes. Here is the rest of it:
- Property tax: $4,800 a year in this example, which is $400 a month
- Homeowners insurance: $1,800 a year, or $150 a month
- HOA dues: zero here, but $75 to $300 a month is common in newer subdivisions
- Maintenance and repairs: budget 1% of value annually, so $4,000, or $333 a month
True monthly cost lands near $3,220. Their rent is $2,100. The gap is $1,120 a month, or $13,440 a year.
That gap is not an argument against buying. It is the price of entry, and some of it comes back to you. In year one, about $320 of each payment goes to principal while roughly $2,015 goes to interest. In exchange you get a fixed housing cost, protection from rent increases, and a deduction if you itemise, which far fewer people do now that the standard deduction is so high.
Step 3: Stress Test Three Futures
Nobody knows where rates or prices go next. Run three versions and see whether you survive all of them.
Scenario A: rates fall, prices hold
You refinance at 5.75% in two years. On a slightly smaller balance, the payment drops by around $230 a month. Pleasant, but not life-changing, and it depends on rates cooperating.
Scenario B: rates hold, prices drift up 4% a year
After five years the house is worth about $487,000 and the loan balance is roughly $338,000. Sell then and you clear about $149,000 before selling costs of 7% to 8%, so call it $112,000 net, then subtract the $12,000 you paid in closing costs to buy. You end up a little over $100,000 ahead of where you started, and it took five years to get there.
Scenario C: rates climb, prices slip, and you have to move in year three
This is the scenario people skip. A job offer in another city, a new baby, a relationship ending. If prices fall 5%, the house is worth $380,000. The balance after three years is roughly $348,000. Selling costs of 7.5% eat another $28,500, which leaves you walking away with about $3,500, having already spent $12,000 to get in. Three years of paying $1,100 more per month than rent, for nothing.
If Scenario C would wreck you, your honest answer to whether now is the right time to buy a house is probably not yet, or yes only if you are confident you will stay put for five years.
Step 4: Find Your Break-Even Year
Add up what it costs to get in and back out. Closing costs on the purchase run 2% to 3% of the price, so $10,000 to $12,000. Selling costs run 7% to 8% once you include commission, title, transfer taxes and the small repairs a buyer will ask for. On a $400,000 house, that is close to $45,000 you need to recover through appreciation and principal paydown combined.
In a normal market, that takes four to six years. In a flat or falling one, considerably longer. If there is a realistic chance you move before then, the math rarely works in your favour, and that is true no matter what interest rates do.
Step 5: Check Your Timeline Against the Real Process
People routinely underestimate this part. Marcus and Dana assumed three weeks from offer to keys. The reality for most buyers is three to six months of searching, then 30 to 45 days from accepted offer to closing once inspections, appraisal and underwriting are done. Understanding what actually happens in each of those weeks matters if your lease ends in the middle of it, because a rate lock that expires costs you money. It is worth reading through the real timeline of buying a house, broken down week by week before you start viewing.
Step 6: Get Your Down Payment and Credit Honest
Ten percent down is a reasonable middle ground. Twenty percent removes private mortgage insurance, which typically costs $100 to $200 a month on a $360,000 loan and buys you nothing except the right to borrow. Five percent gets you in sooner but leaves you with a higher payment, PMI, and less cushion if the market dips. There is no single right answer, and the honest numbers on down payments are worth running against your own savings before you decide.
Then pull all three credit reports. Check the scores your lender will actually use, and dispute anything that looks wrong. If your history includes a bankruptcy, foreclosure or short sale, the waiting period is the single biggest constraint on your timing, and it varies by loan type. The specifics are covered in how long you will wait to buy a house after bankruptcy, including which lenders are more flexible than the guidelines suggest.
Step 7: Read Your Local Market in 20 Minutes
National headlines do not describe your zip code. Open a listing site and check four things:
- Days on market for comparable homes. Under 20 days means competition; over 45 means leverage.
- Months of supply. Under four months favours sellers, over six favours buyers.
- Share of listings with price cuts. A rising number tells you sellers misjudged the market.
- Builder incentives. When new construction is offering rate buy-downs, resale sellers usually have to match them.
Compare that against the rent for an equivalent house. If renting the same three-bed costs $2,100 and owning costs $3,220, you are paying $1,120 a month for the privilege of owning, and you should be able to say out loud why that is worth it to you. For the wider picture on rates, inventory and whether buyers or sellers currently hold the cards, there is a solid practical guide to today’s housing market that covers it.
What to Do With Your Answer
If all three scenarios look survivable and your break-even year sits inside your realistic stay, buy. Get fully underwritten rather than pre-qualified, lock your rate once you are under contract, and keep three to six months of expenses in cash after closing. The furnace will fail in your first winter. It always does.
If the answer is wait, make it a decision with a trigger rather than a vague feeling. Set a savings target and a date, such as $60,000 saved by next June, or a rate threshold you would act on. Put a reminder in your calendar for six months out and run these seven steps again with fresh numbers. Markets move, your income moves, and a no in March is often a yes by October.
If the answer is not yet because of credit, savings or job stability, you now have a specific list instead of a fog. Paying down a card balance, disputing a collection, or waiting out a bankruptcy discharge clock are all things with finish lines. Those finish lines are the only part of this question you actually control, and they are the part worth working on.