Is Now a Good Time to Buy a House? A Readiness Checklist

"Is now a good time to buy a house?" is the question I hear most, and I'll be honest about what I can and can't answer. I can't tell you where prices or the broader market are headed, and nobody else can either. What I can do is help you answer a better question: is now a good time for you? That depends on your savings, your income, how long you plan to stay and what the full monthly cost looks like. This is the checklist I walk people through.

The Consumer Financial Protection Bureau (CFPB) puts it plainly in its homebuying guide: before you apply, consider whether it's the right time for you to buy, and don't rush into a mortgage. I agree with that. A home you can carry comfortably for years is a good purchase in almost any season. A home that stretches you can turn stressful even in a "good" one.

So instead of trying to time anything, I look at five things.

Is now a good time to buy a house?

It depends on your finances and plans more than on the calendar. If you have savings after closing, steady income, a plan to stay for several years and a monthly cost you're comfortable with, you may be ready. I don't predict the market, and neither should anyone selling you a deadline.

How much should I have saved before buying?

You need your down payment, your closing costs and a cushion for emergencies and moving. The CFPB suggests an emergency fund of about three to six months of expenses, kept separate from your down payment.

Is renting better than buying right now?

There's no universal answer. It depends on how long you'll stay, what you'd pay each way and how comfortable you are with the responsibilities of owning. Try your own numbers in the Rent vs Buy calculator.

Should I get pre-approved before I decide?

A pre-approval is a good way to see your numbers with a lender before you commit to anything. The CFPB notes that a preapproval letter shows sellers you're serious but doesn't commit you to a lender.