Key takeaways:
- If you have the means, now may be a good time to buy a house.
- Mortgage rates are dropping again, offering homebuyers a window of affordability.
- It’s a buyer’s market — there are over 500,000 more home sellers than buyers — giving homebuyers leverage.
- Still, most consumers are wary due to record-high house prices, a slow job market, and economic uncertainty, leading to a dreary housing market.
The seasons may be changing, but the housing market isn’t. After an unusually slow spring and summer, the same sluggish trends are persisting well into fall: fewer home sales, limited listings, and record high prices.
But there is a silver lining. Mortgage rates are nearing 12-month lows, helping homebuyers afford thousands more than they could just a week ago. Near-record prices are still keeping most people on the sidelines, though.
A lot is changing, so it’s no surprise that buyers are wondering if now is the right time to take the leap.
In short, whether or not it’s a good time to buy a house boils down to if it’s a good time for you to buy a house. Let’s dive a bit deeper into today’s market trends to help you answer: “Should I buy a house now or wait?”
From Redfin’s Chief Economist
“Nationally, now is a good time to buy, if you can afford it. Prices keep climbing, pushing people out of the market and helping buyers have an upper hand in negotiations. An uneasy economy is making everyone wary, though, and local housing markets vary widely. Buyers serious about making offers should consult a local agent and be confident in their finances and future income.” – Daryl Fairweather, Redfin Chief Economist.
What buyers need to know about the housing market
Here are some key market trends to keep an eye on and help you make an informed homebuying choice.
House prices are high and could rise further
The median U.S. sale price is $441,000 — up 1.4% from a year ago. House prices have posted year-over-year gains for over two years and are 32% higher than they were five years ago.
Because affordability has been so strained, many prospective buyers are holding out for better deals, causing inventory to build up. Sellers have recently begun taking notice, with more pulling their homes from the market in response. This push-pull dynamic is keeping prices higher and pushing demand down.
>> Read: Redfin’s Weekly Economic Breakdown
Mortgage rates are falling
As of November 26th, the daily average 30-year fixed mortgage rate sits at 6.22% — down from last week and in line with longer term improvements. A now-expected rate cut from the Fed was the primary driver behind the recent improvement.
“Mortgage rates are again nearing 12-month lows, low, but buyers should expect them to remain unsteady for the foreseeable future,” cautioned Chen Zhao, Head of Economics Research at Redfin. “The market — not the Fed — determines rates; they price in data well ahead of when it’s released. Rates dropped after the Fed signaled a December rate cut was more likely, but further improvement depends on favorable upcoming government data or a rapidly weakening economy.”
Redfin predicts that mortgage rates will hover between 6-7% this year.
>> Read: Mortgage Rates are Falling. Here’s What Homebuyers and Sellers Should Do About It
How mortgage rates affect housing costs
Mortgage rates are important for buyers because they directly translate to monthly housing costs. The higher the rate, the more you pay every month. If rates drop, you can save tens of thousands over the lifetime of your mortgage.
Let’s see how your monthly payments change with different rates, using data from our Mortgage Calculator.
Buyers have the upper hand
It’s the strongest buyers market in years: Housing inventory has risen from its post-pandemic low, particularly in the South, giving buyers more negotiating power. However, supply is still limited in parts of the Midwest and East Coast, putting sellers in charge and pushing up prices.
In general, though, high costs are keeping buyers on the sidelines and freezing home sales. Some households are even being forced to make major sacrifices like giving up a pet or postponing divorce in order to afford housing. Younger generations are getting hit especially hard and often turning to family for help.
Let’s dive a bit deeper into the data and look at two key market indicators.
Inventory is high, but falling
There are over 2 million homes for sale today — historically low but one of the highest levels since the pandemic. This is the primary driver behind today’s buyer’s market. Florida and Texas have the most homes on the market today, by far.
Housing inventory is high because a larger share of sellers are listing their homes than buyers are buying them, with the biggest imbalances in disaster-prone areas like Florida. This gives today’s buyers more leverage for concessions.
But many sellers are now starting to pull back after realizing they can’t fetch top dollar, which is thinning out the housing stock. Homebuilding has also taken a dive.
Demand is near an all-time low
Even with lower rates and more homes on the market, buyer demand remains sluggish due to high housing costs and economic uncertainty. NAR’s annual Profile of Home Buyers and Sellers backs this up: First-time buyers are older, more cost-burdened, and fewer and farther between.
For buyers who have the budget, this could be a good time to enter the market, as sellers may be more open to negotiation.
Still, there are exceptions. In Midwest cities like Dayton and Detroit, strong demand for affordable homes is pushing prices up and putting sellers in charge. The Bay Area is seeing a surge in popularity, too.
>> Read: How to Sell Your House in 2025: A Comprehensive Guide
Inflation could rise
Critical to the housing market, economists are concerned that inflation could rise due to evolving tariff and immigration policy, which would impact mortgage rates and affordability.
While inflation hasn’t spiked, it is creeping up and remains above the Fed’s target; experts assert that it will continue to climb if policies don’t shift. In fact, a report found that inflation could have dropped by about one-third if it weren’t for tariffs.
Inflation has major implications for buyers. Most importantly, it can lead to higher house prices and mortgage rates, and stretch budgets further. If inflation does tick up, borrowing could get more expensive, making now a smart time to lock in a rate before that happens.
>> Read: A Housing Market Under Donald Trump: What It Could Mean for Buyers, Sellers, and Renters
How to buy in an uncertain economy
With tariffs, economic whiplash, and volatile mortgage rates, many buyers are wary of getting into the market. Here are a few tips from our economists about navigating this shifting landscape.
- Stick to your budget: This isn’t the time to stretch financially. Recession odds are lower than they have been, but the economy is still unstable. Make sure you have enough in savings to cover mortgage payments if your income changes.
- Negotiate, negotiate: The market favors buyers, so use your leverage. There’s more inventory, and offers are increasingly coming in below asking.
- Be smart about rates: Mortgage rates are down but still relatively high. Shop around, compare lenders, and ask about “float down” options if rates drop significantly after you lock in.
- Sell before you buy: If you own a home, consider selling it first. It will give you a clearer budget and help you avoid the risk of carrying two mortgages.
>> Read: How to Buy, Sell or Rent a Home Amid Economic Uncertainty
Are you ready to buy and own a house?
When deciding whether to buy a home in today’s climate, you’ll want to think beyond market conditions and focus on your individual circumstances. Here are some personal considerations to keep in mind.
Financial health
Take stock of your current savings, credit score, and debt levels. Can you afford a house? Or does renting make more sense?
Housing is a long-term commitment, so you’ll want a solid emergency fund – ideally covering 3 to 6 months of expenses – for maintenance and unexpected costs.
Monthly budget
Determine how a mortgage payment at today’s rates might impact your lifestyle. Make sure you can comfortably handle monthly payments, property taxes, insurance, and other homeownership expenses.
Job and location stability
Buying a house makes sense if you plan to stay put for several years. A stable job or reliable income is crucial to avoid financial strain, especially if home prices or interest rates rise further.
Choosing your location is also essential. Is your potential home prone to flooding, wildfires, or other climate risks? This is especially important today, as insurers continue dropping homeowners at alarming rates.
Personal goals and timelines
Think about life events, like starting a family, retiring, or relocating. These factors can make owning a home either more appealing or potentially riskier if you need to move soon.
Lifestyle preferences
Homeownership comes with ongoing responsibilities, like maintenance, repairs, and property taxes. Ask yourself if you have the time, resources, and a desire to handle them.
>> Read: Am I Ready to Buy a House? 8 Questions to Help You Decide
So, is now a good time to buy a house?
If you have the means and are ready to own a home, now is a good time to buy a house. Rates are dropping, though with today’s high prices and volatile economy, it’s hard to know what affordability will look like down the line. Waiting for rates to fall leaves you at risk of competition among buyers and subsequent price hikes from sellers.
In a market this unpredictable, the best approach is to be prepared. Know your budget, connect with a local agent, get preapproved, and move quickly when the right home comes along. The longer you wait, the more competition you could see.
