Is It a Good Time to Buy a House?

If you're wondering whether it's a good time to buy a house, ask this instead: Is it a good time in my life to buy a house?

Housing market trends give important context. But whether this is a good time to buy a house also depends on your financial situation, life goals and readiness to become a homeowner.

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

Here's what to consider.

The market outlook for home buyers

These are some factors affecting buyers in today's market.

Mortgage rates remain stubbornly high

The interest rate on a 30-year fixed-rate mortgage averaged 7.16% annual percentage rate (APR) for the week ending April 18, up 22 basis points from the previous week and up 36 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

Averages are for the week ending April 18, 2024, according to rates provided to NerdWallet by Zillow.

Mortgage rates have improved since autumn, when the 30-year rate topped 8% in October. But buyers haven’t seen much relief this spring. With inflation remaining higher than expected, the 30-year fixed rate averaged 6.76% in March and has averaged above 6.8% most days in April. If the economy eventually cools in 2024, as many experts predict, mortgage rates are likely to see a modest decline.

Another bellwether to watch is the Federal Reserve: If the Fed announces a rate cut at any point this year, which seems possible as long as inflation gets under control, mortgage rates are likely to come down. After a series of 11 increases to the federal funds rate starting in March 2022, the Fed has kept things steady since September 2023. A rate cut of even a fraction of a percentage point would offer buyers more relief.

Higher rates shrink buying power because they make home loans more expensive. For example, the monthly payment for a $350,000 house with a 20% down payment would be $1,679 with a 6% mortgage rate on a 30-year mortgage, not including home insurance and property taxes. With a 7.5% rate, the monthly payment would be $1,958 — $279 higher.

You can't influence average rates, so focus on the things you can control:

• Shop around for the best deal. Especially given today's higher rates, buyers can save $600 to $1,200 per year by applying for loans from multiple mortgage lenders, according to a February 2023 study by Freddie Mac, the government-sponsored entity that buys conforming loans from mortgage lenders.

• Make sure you can afford the monthly mortgage payment. A home affordability calculator can help you crunch the numbers.

• After getting approved for a home loan, consider locking in the mortgage rate until the loan closes to protect against further rate increases.