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Is Now a Good Time to Buy a House? Your Answer for Fall 2022

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Based on data, now is a good time to buy a house — and first-time buyers agree.

According to Fannie Mae’s National Housing Survey, more than 60% of renters would buy a home if their lease ended. Most expect rents to rise sharply in the next 12 months.

The housing market may favor Fall home buyers.

  1. Mortgage rates likely crested around Labor Day
  2. Fewer offers per home give buyers more control
  3. Home sellers are cutting prices after 14 days

Plus, many first-time home buyers now have a higher credit score. 

A recent change in credit scoring added 22 credit score points on average for U.S. consumers, which makes homeownership more affordable.

Should you rent or buy? This article discusses why Fall 2022 is a good time to buy a home.

1. Mortgage Rates Expected To Drop

Conventional 30-year fixed rate mortgage rates rose 0.76 percentage points in the three weeks leading into the Fall. It’s the 15th-fastest mortgage rate increase in the last 50 years, highlighting buyers’ difficulties in August.

However, when rates rise sharply, they tend to drop sharply, too. 

After significant run-ups, thirty-year mortgage rates fall an average of 0.42 percentage points over the next three months. Fall home buyers might see interest rates come back into the 4s.

Also noteworthy: Since 2007, 30-year mortgage rates dropped 86 percent of the time in the fourth quarter.  

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2. Less Competition For Homes For Sale

Another reason Fall 2022 is a good time to buy a home is that competition for homes is lower.

According to the National Association of REALTORS®, more sellers have homes for sale than during any point in the last twelve months. Plus, those homes for sale are getting half as many offers as compared to Spring – and sellers notice it.

Fall season buyers should use the shift to their advantage. 

Unlike earlier this year, today’s buyers can underbid a home and make offers that include necessary contingencies such as mortgage, appraisal, and home inspection. With fewer offers per listing, sellers are more willing to negotiate.

Get pre-approved before your home search.

3. Sellers Are Willing To Cut Prices

It’s a good time to buy a home when sellers are willing to cut prices. 

So far this season, nearly half of all home sellers have lowered their home’s asking price – one-third more than typical, according to Altos Research

Although home prices are rising in many U.S cities, sellers are learning that today’s real estate market won’t support an overpriced home. Right-priced homes sell quickly. Mispriced homes languish.

It’s not a buyer’s market yet, but sellers feel nervous. 

Get pre-approved to buy a home now.

4. New Credit Score System Adds 22 Points

Another reason Fall is a good time to buy a home is that U.S. credit bureaus no longer add medical debt and collections to credit scores. 

Twenty-three million consumers benefit from the medical debt and credit score changes.

The new credit score rules, as of last season:

  1. Satisfied medical collections don’t count against credit scores
  2. Unpaid medical collections are initially ignored
  3. Small medical collections are eliminated from scoring beginning in 2023

The government estimates that the typical home buyer’s credit score is 22 points higher. Higher credit scores give access to lower mortgage rates, lower down payments, and higher home affordability.

How to Buy a House in 2022 With No Down Payment

You don’t need to make a 20 percent down payment to buy a home. 

There are seven low down payment mortgage options for first-time buyers, including two mortgage loans requiring no down payment. Tax credits, grant programs, and other first-time buyer assistance can help you achieve your American Dream.

In addition, offers down payment assistance to first-time buyers with credit scores of 580 or higher. The mortgage includes a 5 percent forgivable down payment loan so buyers can buy a house with no money.

It takes the typical first-time home buyer more than a decade to save twenty percent for a down payment. Stop delaying homeownership. Use a low- or no-down payment loan to take advantage of today’s favorable conditions.

Get pre-approved for a mortgage now.

Get pre-approved for a mortgage today.

Dan Green
Dan Green

Dan Green is a former mortgage loan officer and an industry expert. He's appeared on NPR and CNBC, and in The Wall Street Journal, Bloomberg, and dozens of local newspapers. Dan has helped millions of first-time home buyers get educated on mortgages, real estate, and personal finance. Have mortgage questions? Ask Dan in the chat.

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