Is it still a good time to buy a house?

Whether it’s a good time to buy a house depends on your circumstances and financial readiness. Consider your job security, down payment savings, credit score and long-term goals. Current market conditions, like interest rates and housing prices in your area, also play a role.

To make an informed decision, it helps to look closely at individual and market factors.

Having some money saved can be helpful when buying a home. But how much? You may need as little as 3 to 3.5 percent down for a Conventional or FHA loan, while VA and USDA loans have zero down payment requirements. If saving for a down payment is challenging, down payment assistance programs may be able to help. Down payment assistance is often location and/or income based, though Guild does offer some national programs as well.

A reliable job and income make it easier to manage monthly mortgage payments. Usually, you’ll need at least two years of steady employment and income to qualify for a mortgage. If you’re self-employed or recently changed jobs, you may need extra documentation to show consistent earnings. If traditional income verification isn’t an option, a bank statement loan may allow you to qualify using bank deposits.

A strong credit score can help you qualify for a better mortgage rate and loan terms. You’ll typically need a score of 620 or higher for a Conventional loan, while an FHA loan accepts a score as low as 540 to 580, depending on your down payment. If your credit needs improvement, ask your Guild loan officer whether it makes more sense to buy now or wait.

Usually, five to seven years is considered a good guideline for how long you should stay in a home to make buying worth it. This timeframe allows you to recover closing costs and build enough equity to make selling or refinancing beneficial. Of course, the exact timeline can vary based on the housing market, interest rates and your personal situation.

Home prices can vary by area, but in the next year, they’re expected to keep going up. Higher home prices might mean fewer homes in your price range. If you’re already ready to buy, acting sooner could help you get ahead of rising prices.

If you’re wondering how to increase home equity, buying in a rising market is one way to get started. Home equity is the difference between what you owe on your mortgage and what a home is worth. As home prices rise, the value of your home increases, which can help build your equity over time. According to the latest numbers from the Federal Reserve, the average homeowner has nearly 40-times the net worth of a renter.

What can you do with home equity once you’ve earned it? Many homeowners cash out on their equity to fund renovations, pay down debt, cover tuition, invest in a business or pay for large expenses.

When mortgage rates rise, so does your projected monthly mortgage payment. This can cause your buying power to decrease—meaning, you may qualify for a lower loan amount. Many people question if they should put off buying a house until rates come down.

It helps to understand where mortgage rates are heading. It’s unlikely that rates will ever be as low again as they were in the pandemic. Mortgage rates may drop slightly in the coming year. But if all the above factors support buying now, you might still benefit from buying sooner. Homeownership secures your monthly housing cost (which may still fluctuate due to property taxes and insurance), buffering rising prices linked to inflation.