Dear Friend in Finance,
I've been renting for a long time, and I’m getting tired of it. But interest rates are high and the market still feels crazy. Should I be waiting for things to settle down, or is it okay to start looking to buy now?
Sincerely,
Feeling Priced Out
Dear Feeling Priced Out,
This question is on a lot of people’s minds right now. And if you're someone with a steady income, some savings, and a desire to put down roots, it’s easy to feel like you missed the window or like now is a terrible time to jump in.
Let me walk through a few things to help you think about this more clearly.
Real Estate Is Local
The real estate market doesn’t work like a stock chart. People sometimes talk about housing like it’s a single market that rises and falls everywhere at once. It’s not. Real estate is deeply local. One city might be cooling off while another is just heating up. A headline about “more supply” might refer to new subdivisions in Texas or Arizona, not your neighborhood in Florida or New York.
If you read that prices are dropping in Phoenix, it doesn't necessarily mean anything about your area. Different regions move in different cycles, and it’s easy to get a misleading picture by following national coverage. The only way to really know what’s happening is to look at your local market directly.
Rates Are High, But So Is Rent
Yes, interest rates are higher than they’ve been in the last decade. But rent is also higher than it’s ever been, and still rising in many places. A fixed-rate mortgage, even at a higher rate, offers something rent doesn’t: predictability. And if interest rates fall in the future, refinancing is an option. That’s not something you can do with your rent.
The Right Time Has More to Do With You
The biggest factor in whether it’s a good time to buy isn’t the market. It’s you. Are you ready to stay put for at least five years? Do you have enough saved for a down payment and a cushion for home repairs? Do you have reliable income and room in your budget for the unexpected?
If you can answer yes to those questions, it may be the right time for you to buy. Even if mortgage rates feel high. Even if prices aren't falling. The market doesn’t have to be perfect for it to be the right move for you.
Sincerely,
Your Friend in Finance