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When Is a Good Time to Buy a House?

If you’ve finally decided homeownership is the next stage for you, timing can be key. Here are a few factors to consider.

December 16, 2021

You’ve probably heard it a million times: Owning a home can be an essential step to say goodbye to the unpredictability of renting and building up equity in real estate instead. 

But, when is a good time to buy a house for the first time? 

In the home-buying process, timing means several things:

  • Is it a good time in your life to buy?

  • Is it the right time of year to buy?

  • Is it the perfect moment in the market to buy?

Let’s run through these different factors so you can make the right decision.

Is it a good time in your life to buy? 

A home purchase isn’t a decision to take lightly, and first-time homebuyers, in particular, are wise to take caution. However, asking yourself these questions will help you figure out if it’s a good time in your life to buy.

How's your financial situation?

If you’re wondering when a good time to buy a house is or if you’re ready to own a home, you need to think about your circumstances. Above all, your financial situation is critical — especially if you’re buying for the first time. 

Your credit score matters a lot here (unless you’re a cash buyer). The higher your score, the better chance you have of a mortgage provider deeming you a creditworthy borrower and giving you a loan. Your credit score will also affect the type of loan and mortgage interest rates you receive.

But, as important as your credit score is, it’s not everything. You’ll still need to prove you’re a good borrower in other ways, including a: 

  • Good income

  • Solid employment history 

  • Sizable down payment

If you don't have these components in place, it’s probably not the right time for you to buy. 

Are you ready to settle down?

Another factor to consider is whether you’re emotionally ready to buy a house. If you’re still unsure about where you want to live or the kind of place you want to call home, you might be better off postponing the decision.

Although it’s generally agreed that paying a mortgage is more affordable than paying rent, this is only true if you plan on living somewhere for long enough. Buying a house means extra costs like property taxes, repairs and homeowners insurance that renters don’t face, and there are usually sizable closing costs associated with purchasing a home in the first place.

Many people will decide it’s worth it if they plan to “invest” in a home and live there over the long run, but otherwise, renting is the safer and more flexible option.

What are the market conditions?

Now that we’ve taken a look at the individual factors to consider, let's go macro. 

It’s no secret that the economy impacts when it is a good time to buy a house. House prices in the U.S. dropped 11.9% in March 2009 and increased 16.5% in June 2021. Imagine how it must've felt for those who bought their properties shortly before a massive price decline.

Another important factor to consider is interest rates — the lower interest rates are, the lower your mortgage payments will be each month. Although your credit score is one factor in determining this, another is the Federal Reserve’s interest rates and monetary policies

Since fixed-rate mortgages involve locking in a rate for up to 30 years, this is a big deal. For instance, the average mortgage rate in January 1990 was 9.9%; in October 2021, it was just 3.07%.

House prices are also affected by broader market conditions. Prices tend to drop during a recession and increase during a boom time, which is why house prices decreased so much during the 2009 financial crisis. 

Although some experts recommend waiting it out until market conditions change, this may be taking things too far. It’s impossible to make accurate predictions — there might be a crash tomorrow, or prices might increase for the next decade. The pandemic has shown us how unpredictable the real estate market can be.

What's the best time of year?

Although the market might remain in a boom for years followed by a lull, it’s also true that certain times of the year are more popular than others. When there’s more demand for homes than supply, we enter a “seller's market,” and house prices rise. The reverse happens when there’s a higher number of homes available than people searching. Homebuyers prefer to shop (and homeowners to sell) at similar times.

Home prices are usually lowest during the winter months — most people would rather snuggle up next to a fire than trawl around the city for house viewings. Late summer and fall are also good times to buy since the school year is starting, making it inconvenient for most people to move. Although fewer homes are available over these periods, there are even fewer buyers, meaning less competition.

In contrast, many people want to buy their house in spring and summer. This means prices increase, and there’s a greater chance of bidding wars. However, there also tends to be more houses for sale over spring and summer. 

In summary: Winter and fall are great times to put your negotiating skills to the test when it comes to the asking price. But if you’d rather find your dream home than snag a bargain, you might be better off searching during the summer months.

For more advice, talk to a real estate agent or Realtor in your area — there may be nuances depending on the local market.

How to maximize your savings

If you’ve decided the time is right for you to buy based on the factors above and you’re ready to go house hunting, your next question is probably about how to save more so you can maximize your down payment and cover those pesky fees.

Firstly, nothing sinks your finances more effectively than a load of debt. So, before you do anything else, prioritize paying off your debt as quickly as possible. Tally’s† credit card repayment app can help consolidate your higher-interest debt into one lower-interest line of credit.

Also, see if you can make changes to your spending habits. Try tracking where your finances are going, and then budget accordingly.

Or maybe you can negotiate your bills to free up a little extra money — you might be surprised at how many companies are willing to lower their prices if you simply ask them to.

Finally, consider if you can take on a side hustle to bring in more money. This could be as structured as working a few hours at a bar or cafe or a more flexible role that requires less commitment, like selling old stuff in your house or using cashback apps.


No time like the present?

Deciding on a good time to buy a house doesn’t depend on a single factor. It comes down to:

  • When you’re ready

  • When the market is appealing

  • The most appropriate time of the year 

In many cases, these factors aren’t all going to align perfectly, so don’t sweat it too much. Sometimes, the smartest move is to just bite the bullet and start building your new life in your new home.

Financial decisions can require pretty complex calculations and considerations. If you want to be sure you’re not missing any crucial information the next time you face a conundrum like this one, subscribe to Tally's newsletter for more financial tips that come straight to your inbox each week.

To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR (which is the same as your interest rate) will be between 7.90% and 29.99% per year and will be based on your credit history. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 to $300.