Is It a Good Time to Buy a House?

Summer’s here, and so is peak homebuying season. Housing market trends matter, but they’re only part of the picture when you’re wondering whether it’s a good time to buy a house. The more important question: Are you financially and emotionally ready?

Let’s dig into both levels: The market and your mindset.

» MORE: Should I buy a house? How to tell if you're ready

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How’s the housing market right now?

Home prices keep climbing, and mortgage rates still aren’t budging. In many ways, it’s more expensive than ever to buy a house. If you’ve been house-hunting for a while, you probably feel the pinch: It’s even tougher to squeeze last year’s budget into this year’s market.

No matter how long you’ve been looking, there’s reason to be hopeful in the months ahead. Summer is peak season for home buying and selling, and we’re finally seeing more inventory (houses for sale) hitting the market. That means buyers have more choice — and hopefully less of a battle, compared to last year when inventory was scarce.

If your finances are solid and you feel good about moving, it’s a fine time to buy.

» MORE: Calculator: How much house can I afford?

If you’re house hunting, keep an eye on the following numbers and trends:

Mortgage rates.
Inflation and the economy.
Inventory.
Home prices.
Home sales.
Competition.

Weekly average mortgage rates

Mortgage rates fell for the fifth consecutive week, giving borrowers a bit of a break as summer heats up.

The interest rate on a 30-year fixed-rate mortgage averaged 6.74% annual percentage rate (APR) for the week ending July 3, down 10 basis points from last week and down 20 basis points from a year ago, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of 1%.

Average weekly mortgage rates

Mortgage type	APR
30-year fixed mortgage	6.74%
15-year fixed mortgage	5.76%
5-year adjustable	7.31%

Averages are for the week ending July 3, 2025, according to rates provided to NerdWallet by Zillow.

🤓Nerdy Tip

Each mortgage lender sets their own rates and fees. Compare offers from at least three mortgage lenders to get the best deal. Rate shopping can save you thousands of dollars over the life of the loan.

To learn more about mortgage rates, check out these resources from NerdWallet:

📍 Right now: Mortgage rates today
📈 Looking ahead: Mortgage interest rates forecast
🤔 Shopping around: How to get the best mortgage rate

How do mortgage rates affect housing costs?

When mortgage rates are high, your home buying budget doesn’t stretch as far. Let’s say you’re prepared to make a 20% down payment on a $350,000 house. Here’s what your monthly payments would look like at different interest rates:

Interest rate	Monthly principal + interest*
5.5%	$1,590
5.75%	$1,634
6%	$1,679
6.25%	$1,724
6.5%	$1,770
6.75%	$1,816
7%	$1,863
7.25%	$1,910
7.5%	$1,958

*For a 30-year fixed-rate mortgage. Does not include homeowners insurance or property taxes.

» MORE: NerdWallet’s picks: Best mortgage lenders

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Inflation and the economy

Tariffs + recession whispers = instant overthinking. Is it a bad time to buy a house?

It’s normal to feel worried about making a long-term financial commitment right now. Here’s how to stay grounded: .

🤔 Consider pausing: If your finances feel shaky — for example, you’re worried about job security or paying bills — it’s wise to hold off on buying a home for a bit.
😌 Stay the course: If your income is steady and your budget says the numbers work, don’t let scary “what if” headlines throw you off track.

Did you know...

The Federal Reserve, the nation’s central bank, indirectly influences interest rates on all loans (including mortgages). With persistent inflation, the committee has signaled it won’t cut the federal funds rate until this fall, at the earliest.

» MORE: How the Federal Reserve affects mortgage rates

Is it a buyer’s or seller’s market?

Right now: Seller’s market (moderate)

While it isn’t a full-blown buyer’s market just yet, the vibe is (finally) shifting in a “buyer-friendly direction,” Danielle Hale, chief economist at Realtor.com, said in a statement.

Here are the signs she flags of a more balanced market:

✅ More houses to choose from.
✅ Less competition.
✅ Wiggle room on price (including sellers accepting offers below asking).
✅ Willingness to negotiate on contract terms.

“We’re seeing more buyer-friendly market signals than we have in years,” she said. “In fact, outside of a temporary blip early in the pandemic, we’re likely to see the most buyer-friendly summer in nine years.”

» MORE: How to win a bidding war on a house

What’s the difference between a buyer’s market and a seller’s market?

Whether we’re in a buyer’s or seller’s market all comes down to supply and demand. Available inventory affects who has the upper hand in negotiations.

Buyer’s market = high inventory. Buyers have lots of choices and can take their time. Price cuts are common. Buyers might ask sellers to cover some costs or fees.
Seller’s market = low inventory: Buyers have fewer choices. Prices and competition heat up. Expect multiple offers above asking price.
Balanced market = enough homes to go around: Supply and demand are roughly even. This generally happens when the real estate market has about six months’ worth of available inventory.

Did you know...

When a house is listed for sale, it becomes “inventory.” Inventory is measured as a number of months’ supply at the current sales pace. A six-month supply means it would take six months to sell all listed homes, if no new ones came on the market.

Let’s dig into the details using May 2025 data from the National Association of Realtors (NAR).

Inventory: A positive shift

Good news: Inventory is up more than 20% compared to a year ago, reports the NAR.

Currently, inventory sits at a 4.6-month supply of homes for sale, rising from 4.4 months in April and 3.8 months a year ago in May 2024.

Home prices: High and still climbing

Meanwhile, home prices continue their upward trend. Year-over-year prices have gone up each month for 23 months and counting. The national median price for existing homes sold in May was $422,800, up 1.3% from May 2024, according to the NAR.

Year-over-year prices differ across the four U.S. regions, Midwest, Northeast, South and West. Here’s a breakdown:

Midwest: $326,400 up 3.4%
Northeast: $513,300, up 7.1%
South: $367,800, down 0.7%
West: $633,500, up 0.5%

🤓Nerdy Tip

Buying a house is expensive up front, but it can help you build long-term wealth. Try our rent vs. buy calculator to compare costs over time and see your break-even point.

» MORE: How much does it cost to buy a house?

Home sales: “Meh” momentum

The steep cost of buying might be to blame for fairly flat home sales. Sales of existing homes ticked up 0.8% from April to May. Compared to last year, sales slid 0.7%.

"The relatively subdued sales are largely due to persistently high mortgage rates,” said Lawrence Yun, NAR chief economist, in a news release. "Lower interest rates will attract more buyers and sellers to the housing market. Increasing participation in the housing market will increase the mobility of the workforce and drive economic growth. If mortgage rates decrease in the second half of this year, expect home sales across the country to increase due to strong income growth, healthy inventory, and a record-high number of jobs."

Competition: Easing up

The May 2025 Realtors Confidence Index, a survey of the NAR’s members, highlights recent trends real estate agents are seeing in their local markets that are easing the competition among buyers. Some shifts to note:

Bidding wars aren’t the norm. A home listed for sale received an average 2.5 offers in May, up from 2.4 last month but down from 2.8 last year. For context: In the era of hot bidding wars in 2021 and 2022, the average was around five offers per home.
Few homes are selling above list price. In May, 28% of homes sold above listing price, up from 18% last month and down from 30% last year.
Homes are staying on the market longer than last year. Houses stayed on the market for a median 27 days in May. That’s speedier than last month (29 days) but longer than the same time a year ago (24 days).

Overall, though, demand still outpaces supply. This is hardly a mellow market: Good homes sell quickly, and buyers should still expect competition out there.

» MORE: How to buy a house, step by step

Should I buy a house now or wait?

Ultimately, whether it’s a good time to buy comes down to your personal financial readiness. If your credit score needs work or you’re in major debt, consider tackling those goals first. You also need to be emotionally ready for the commitment of owning a house.

Here are some green flags that it’s a good time to buy.

✅ Stability: You have steady income and employment, and you’re ready to stay in one place for several years.
✅ Lifestyle fit: For first-time buyers, you’re up for the responsibility of paying for maintenance and repairs. For repeat buyers, your current home no longer meets your needs: You’re ready for more space, a new neighborhood or to downsize.
✅ Savings: You'll need money for a down payment and closing costs, as well as for moving costs and other expenses.
✅ Low debt: Your debt-to-income ratio (DTI) shows how much of your monthly income goes toward paying debt (like student loans, car payments or credit cards). The lower your DTI, the better your mortgage rates and terms. A DTI of 36% or below is most attractive to lenders.
✅ Good credit score: Borrowers with credit scores of 740 and above get the best mortgage rates and terms. It’s possible to qualify with a score in the 600s, but your options are limited.

Did you know...

According to mortgage data provider ICE Mortgage Technology, the average FICO credit score for purchase mortgages in the last 30 days was 736. The average DTI was 40%.

» MORE: Home loans for bad credit

The takeaway: If you’re ready to buy, jump in now.

Don’t try to time the market perfectly. If you’re in a good spot, national trends don’t have to be.