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

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Now is a good time to buy a house.

Timing is a question that every prospective homeowner faces. After all, we don’t want to make a huge investment like this at the wrong time. And when it comes to buying a home, timing is everything.

Or is it?

Catching the unpredictable real estate market at the right time is nearly impossible, and it may be overrated. Regardless of the magical combination of the purchase price and interest rate you may be waiting for when you find a home you love at a monthly payment you can afford, it’s your time to buy.

Here are some reasons why 2022 is a good time to buy a home.

Is Now A Good Time To Buy A House? [3 Keys for Buyers in 2022]

1. Home Values Are High

Home values are a huge reason to buy a home, especially if you plan to stay long-term.

The market is hot and values are high. And with more buyers than there are homes for sale, it seems that they won’t be plummeting anytime soon.

But this is nothing new. Historically, long-term home prices have been going up. There have been a few fluctuations along the timeline, but they’ve happened quickly and eventually corrected themselves.

These rising home prices are why homeownership is the most powerful wealth-building tool in the country. It’s a reason to buy, not wait.

In some areas, some home prices are outpacing income rates.

Are High Home Prices a Reason to Wait?

High home prices aren’t necessarily a reason to wait to buy a home. Although this is our number one reason to buy a home right now, some people think you’ll save a bunch of money if you wait for prices to drop.

However, in the last 10 years, the most significant change in home prices over three months has been an increase of 6% or a decrease of 5%.

Those percentages translate into a lot of dollars. And if those historic swings repeat, it would make mortgage payments go up or down by about $50 a month on a $200,000 home. But home prices don’t have to dip.

There’s as much of a chance that they stay the same or increase.

Plus, home prices aren’t the only thing that affects your monthly payment.

Don’t forget about interest rates.

2. Interest Rates Are Low

Low rates are another reason to buy a home right now. Rates are almost as low as they’ve ever been.

When interest rates are low, it means you can buy a more expensive house without considerable jumps in your monthly payment. Low rates mean higher levels of affordability.

Affordability doesn’t mean the purchase price of a home. It relates to your monthly payment. And interest rates affect affordability more than anything.

Read on if you want to see how much interest rates affect your monthly payment compared to home prices.

How Interest Rates Affect Monthly Payments and Home Prices

Home prices aren’t the only thing that rise and fall. Not only do rates move faster than home prices, but they affect your bottom line a lot more.

The most significant rise in interest rates we’ve seen in the last 10 years is 1% in a three-month period.

Are Home Prices or Interest Rates More Important? [First-Time Home Buyer Tips]

Remember that $50 a month payment change from earlier due to home prices?

1% might not sound high, but an interest rate change like this would raise your payment by almost $120 a month on that $200,000 home.

If you’re pre-approved at a rate that gives you a monthly payment you’re comfortable with, it might be a good idea to stop waiting.

How to Buy a House in 2022 With No Down Payment

If you’re waiting to buy a home because the down payment is holding you back, you’re not alone. It’s one of the main hurdles facing new home buyers. Some are taking drastic measures to cut costs, like taking funds out of retirement savings or paying down debt with cryptocurrency.

Before you consider that, many low down payment mortgage options are available for first-time home buyers.

There are also ways to buy a house with no money. Homebuyer has a down payment assistance program that will allow you to purchase a home with nothing down.

Final Thoughts

There is no magic metric or forecast that will tell you when it is good to buy a home. No matter the home prices or rates, the best time to buy a house is when you are financially ready. Don’t let friends, family, or internet “experts” push you into a decision you may regret later.

To the people out there who have already decided to buy their first home, you probably know that you’ll need to get pre-approved before you start your house hunting.

Click the link below for a quick, simple, and free pre-approval in three minutes.

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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