Key takeaways:
If you have the means, now may be a good time to buy a house.
Mortgage rates dropped again, continuing their long-term improvement and offering homebuyers a window of affordability.
It’s a buyer’s market – there are over 500,000 more home sellers than buyers – giving homebuyers leverage.
Still, most consumers are wary due to high house prices, a slow job market, and broad economic uncertainty, leading to a slow housing market.
The seasons may be changing, but the housing market isn’t. After an unusually slow spring and summer, the same sluggish trends are persisting into fall: fewer home sales, limited listings, and record high prices.
However, there is good news for homebuyers: Mortgage rates continue to drop as economic uncertainty piles up, helping buyers afford thousands more than they could in May. The ongoing government shutdown is adding to the volatility.
Even so, most buyers aren’t taking advantage, as high prices and economic volatility keep them on the sidelines. So, it’s no surprise that people are wondering if now is the right time to take the leap.
In short, whether or not it’s a good time to buy a house boils down to if it’s a good time for you to buy a house. Let’s dive a bit deeper into today’s market trends to help you answer: “Should I buy a house now or wait?”
From Redfin’s Chief Economist
“Nationally, now is a good time to buy, if you can afford it. Prices keep climbing, but with falling mortgage rates and significantly more inventory, buyers have an upper hand in negotiations. A weak job market and political tensions are making everyone uneasy, though, and local housing markets vary widely. Buyers serious about making offers should consult a local agent and be confident in their finances and future income.” – Daryl Fairweather, Redfin Chief Economist.
What buyers need to know about the housing market
Here are some key market trends to keep an eye on and help you make an informed homebuying choice.
House prices are high and could rise further
The median U.S. sale price is $436,000 – up 1.7% from a year ago. House prices have posted year-over-year gains for over two years and are 32% higher than they were five years ago.
Because affordability has been so strained, many of today’s prospective buyers are holding out for better deals, causing inventory to build up. Sellers have recently begun taking notice, with more pulling their homes from the market in response. This push-pull dynamic is keeping prices higher and pushing demand down.
>> Read: Redfin’s Weekly Economic Breakdown
Mortgage rates are falling
As of October 22nd, the daily average 30-year fixed mortgage rate sits at 6.17% – down significantly from last week and in line with longer term trends. Economic volatility and anticipated Fed rate cuts have been the primary drivers behind the sustained improvement.
“Mortgage rates continue to drop, but economic uncertainty means buyers should expect them to remain unsteady for the foreseeable future,” cautioned Chen Zhao, Head of Economics Research at Redfin. “The market – not the Fed – determines rates; they price in data well ahead of when it’s released. Geopolitical tensions and regional bank worries have pushed rates down, but future improvement depends on favorable upcoming data or a rapidly weakening economy.”
Additionally, because the government is shut down, official economic reports are delayed, which could have unusual effects on the market. Tariff and immigration policies are also wildcards.
Redfin predicts that mortgage rates will hover between 6-7% this year.
>> Read: Mortgage Rates are Falling. Here’s What Homebuyers and Sellers Should Do About It
How mortgage rates affect housing costs
Mortgage rates are important for buyers because they directly translate to monthly housing costs. The higher the rate, the more you pay every month. If rates drop, you can save tens of thousands over the lifetime of your mortgage.
Let’s see how your monthly payments change with different rates, using data from our Mortgage Calculator.
Buyers have the upper hand
It’s the strongest buyers market in years: Housing inventory is rising across the country, particularly in the South, giving buyers more negotiating power. However, supply is still very low in parts of the Midwest and East Coast, putting sellers in charge and pushing up prices.
In general, though, high costs are keeping buyers on the sidelines and freezing home sales. Some are making major sacrifices like giving up a pet or postponing divorce in order to afford housing. Younger generations are being hit especially hard and turning to family for help: Nearly a quarter of Gen-Z and Millennial homebuyers used family money to help with down payments.
Let’s dive a bit deeper into the data and look at two key market indicators.
Inventory is at a five-year high
There are more homes for sale in the U.S. today than there have been since the start of the pandemic – nearly $700 billion worth. Florida and Texas have the most homes on the market today, by far. This is the primary driver behind today’s buyer’s market.
Housing inventory is rising because more sellers are listing their homes than buyers are buying them, with some of the largest increases in disaster-prone areas like Florida. This gives today’s buyers more leverage for concessions.
But many sellers are now starting to pull back after realizing they can’t fetch top dollar, which could cause trends to shift in the months ahead.
Demand is near an all-time low
Even with lower rates and more homes on the market, buyer demand remains sluggish due to high housing costs and economic uncertainty. For buyers who have the budget, this could be a good time to enter the market, as sellers may be more open to negotiation.
Still, there are exceptions. In Midwest cities like Dayton and Detroit, strong demand for affordable homes is pushing prices up and putting sellers in charge.
>> Read: How to Sell Your House in 2025: A Comprehensive Guide
Inflation could rise
Critical to the housing market, economists are concerned that inflation could rise due to evolving tariff and immigration policy, which would impact mortgage rates and affordability.
While inflation hasn’t spiked yet, it is creeping up, and experts assert that they will continue to climb if policies don’t shift. In fact, a recent report actually found that inflation should have dropped by about one-third if it weren’t for tariffs.
Inflation has major implications for buyers. Most importantly, it can lead to higher house prices and mortgage rates, and stretch budgets further. If inflation does tick back up, borrowing could get more expensive, making now a smart time to lock in a rate before that happens.
>> Read: A Housing Market Under Donald Trump: What It Could Mean for Buyers, Sellers, and Renters
How to buy in an uncertain economy
With tariffs, economic whiplash, and volatile mortgage rates, many buyers are wary of getting into the market. Here are a few tips from our economists about navigating this shifting landscape.
Stick to your budget: This isn’t the time to stretch financially. Recession odds are lower than they have been, but the economy is still unstable. Make sure you have enough in savings to cover mortgage payments if your income changes.
Negotiate, negotiate: The market favors buyers, so use your leverage. There’s more inventory, and offers are increasingly coming in below asking.
Be smart about rates: Mortgage rates are down but still relatively high. Shop around, compare lenders, and ask about “float down” options if rates drop significantly after you lock in.
Sell before you buy: If you own a home, consider selling it first. It will give you a clearer budget and help you avoid the risk of carrying two mortgages.
>> Read: How to Buy, Sell or Rent a Home Amid Economic Uncertainty
Are you ready to buy and own a house?
When deciding whether to buy a home in today’s climate, you’ll want to think beyond market conditions and focus on your individual circumstances. Here are some personal considerations to keep in mind.
Financial health
Take stock of your current savings, credit score, and debt levels. Can you afford a house? Or does renting make more sense?
Housing is a long-term commitment, so you’ll want a solid emergency fund – ideally covering 3 to 6 months of expenses – for maintenance and unexpected costs.
Monthly budget
Determine how a mortgage payment at today’s rates might impact your lifestyle. Make sure you can comfortably handle monthly payments, property taxes, insurance, and other homeownership expenses.
Job and location stability
Buying a house makes sense if you plan to stay put for several years. A stable job or reliable income is crucial to avoid financial strain, especially if home prices or interest rates rise further.
Choosing your location is also essential. Is your potential home prone to flooding, wildfires, or other climate risks? This is especially important today, as insurers continue dropping homeowners at alarming rates.
Personal goals and timelines
Think about life events, like starting a family, retiring, or relocating. These factors can make owning a home either more appealing or potentially riskier if you need to move soon.
Lifestyle preferences
Homeownership comes with ongoing responsibilities, like maintenance, repairs, and property taxes. Ask yourself if you have the time, resources, and a desire to handle them.
>> Read: Am I Ready to Buy a House? 8 Questions to Help You Decide
So, is now a good time to buy a house?
If you have the means and are ready to own a home, now is a good time to buy a house. Rates have dropped, but with today’s high prices and volatile economy, it’s hard to know what affordability will look like down the line. Waiting for rates to fall further leaves you at risk of competition among buyers and subsequent price hikes from sellers.
In a market this unpredictable, the best approach is to be prepared. Know your budget, connect with a local agent, get preapproved, save big with Rocket Mortgage, and move quickly when the right home comes along. The longer you wait, the more competition you could see.
