Is now a good time to purchase a house?

[UNITED STATES] Here’s a reality check that may either soothe or unsettle you: Not even a housing economist can definitively say whether it’s the right time to buy a home.

Chen Zhao, who leads economic research at the real estate platform Redfin, is still working through the same question herself. When we spoke recently about the state of the U.S. housing market, she had just wrapped up a home tour in Manhattan — and walked away with more questions than answers.

“I came out thinking, ‘Should I be buying a home right now?’” Zhao said. “And the answer is complicated.”

It’s a confusing moment for buyers — even those equipped with advanced degrees and troves of housing data. Mortgage rates, after months of easing, have crept back up, dampening hopes of more affordable monthly payments. Add to that a murky economic outlook, partly fueled by lingering effects of Trump-era tariffs and revived recession concerns, and it’s no wonder potential buyers are hesitant. When your stock portfolio looks shaky — or worse, your job feels uncertain — it’s hard to make a six-figure commitment.

Yet, even amid economic headwinds, the housing market isn’t entirely devoid of opportunity. One notable bright spot is the increase in inventory, giving buyers more options and greater leverage. This shift toward a more balanced market means buyers can be choosier — and potentially negotiate better deals, especially if they’re patient and strategic.

So yes, in some ways, it’s a tough time to buy. But there are reasons for cautious optimism. Inventory is rising, giving house hunters their widest selection in years. Home price growth is cooling. And the foundational perks of homeownership — stability, personal space, and long-term investment potential — remain as compelling as ever.

“I think those benefits always exist,” said Nick Gerli, founder and CEO of real estate analytics firm Reventure App. “The real question is whether the financials actually add up.”

This is the second article in Business Insider’s six-part series on navigating big life choices in the context of economic and policy volatility — the first explored launching a business in uncertain times. This time, we’re examining whether now is the moment to take the plunge into homeownership. To get clarity, I spent weeks speaking with economists, real estate professionals, and analysts to piece together a framework for today’s buyers.

One major factor reshaping the market: remote work and shifting lifestyle priorities. The pandemic pushed many Americans to seek larger spaces and relocate to less congested areas — a trend that continues to influence demand in suburbs and smaller towns. For buyers weighing a move, keeping these long-term shifts in mind could help inform smarter decisions about location and property type.

Of course, any blanket advice is problematic — real estate is hyperlocal. Market conditions can vary dramatically from city to city. Still, most experts I consulted said the prudent move for many would be to wait. But life doesn’t always offer that luxury. People change jobs, grow families, or go through personal transitions that make moving unavoidable. In those cases, there are still smart ways to navigate a challenging market: take your time, negotiate aggressively, and look for concessions like price cuts or closing cost credits.

The Current Reality for Homebuyers

Let’s be honest: the affordability picture isn’t pretty. Home prices are still high, with Redfin data showing a nearly 43% jump since the start of the pandemic. And mortgage rates — arguably the bigger barrier — are back on the rise. After briefly dipping toward 6% last year, the average rate on a 30-year mortgage has bounced back to around 6.8%. Most industry voices agree: this is likely the new normal. The era of 3% mortgages is behind us.

Macro factors like inflation and interest rates are playing a major role. Inflation eats into purchasing power. Rising interest rates increase the cost of borrowing. Together, they create a formidable one-two punch for buyers trying to make the numbers work.

Zillow pegs the median home price at around $360,000. For a typical American household, that means spending more than 35% of monthly income on housing — even after putting down a sizable 20% deposit. And that threshold, experts say, defines being financially overextended.

Gerli’s analysis suggests the mortgage-to-income ratio is nearing 39%, a level not seen since the 2006 housing bubble. “A lot of people can’t qualify for a home loan,” he said. “And those who can are maxing out their budgets and feeling incredibly stretched.” His take? “To be perfectly honest, in most markets, it’s a raw deal.”

Is Renting the Better Bet?

That leads to the inevitable question: Is renting the smarter move? In many cases, yes. With a wave of new apartment developments nationwide, renters are benefiting from increased supply. Landlords are offering incentives — like a month or two of free rent — and focusing more on retaining tenants than raising rents.

Zillow data shows the median renter spends 29.4% of income on housing — still near the affordability limit, but generally more manageable than mortgage payments. Renters also avoid large upfront costs like down payments and are insulated from surprise expenses like roof repairs or appliance breakdowns. Zhao summed it up simply: “Rent prices are relatively low compared to purchase prices. And renting gives you flexibility — you’re not tying up all your capital.”

If You’re Ready to Buy, Think Long-Term

Let’s say you can afford to buy, or have to move. The next critical consideration is how long you plan to stay. If you're buying a home you’ll outgrow quickly or in an area you’re unsure about, that’s a risky move — especially with price volatility in play. Zillow now expects home prices to decline by 1.7% over the next year, a reversal from its earlier forecast of a 3% rise.

Demographic forces are also reshaping demand. As millennials and Gen Z enter the market, their preferences — urban access, sustainability, tech integration — are influencing what kinds of homes are in demand. Meanwhile, baby boomers are aging in place, creating additional pressures on inventory.

If you're likely to sell within a few years, a dip in prices could hit hard. But those planning to stay longer stand a better chance of riding out the market's ups and downs.

There Are Opportunities — If You Know Where to Look

Even in a tough market, buyers still hold some cards. With inventory rising and sellers more open to negotiating, now is a time when thoughtful buyers can take advantage. Realtor.com reported nearly 1 million homes were listed in April — a 31% jump from the same time last year. Though inventory remains below pre-pandemic levels, it’s a marked improvement. And roughly 18% of listings saw price reductions — the highest April share since at least 2016.

Geographically, buyers in the South and Southwest (the so-called Sunbelt) are seeing the biggest advantages, with looser inventory giving them more bargaining power than those in tighter markets like the Northeast and Midwest.

Final Thought: Be Strategic

In today’s market, savvy shopping matters more than ever. Compare mortgage rates aggressively — and if you can, look for assumable loans that lock in older, lower rates. Some buyers are also saving thousands by negotiating lower agent commissions and using those savings to strengthen their position with sellers.

The bottom line? It’s not a clear-cut “yes” or “no” moment for homebuyers — but with careful planning and a strong strategy, it’s still possible to make a move that works.