Looking to Buy a House? It's Not the Worst Time

As the housing market heated up during the pandemic, many would-be homeowners found themselves unable to buy despite making multiple offers or waiving inspections. Now, rising mortgage rates and low inventory may have them feeling quite depressed. In May, consumer sentiment about home-buying reached an all-time low. And yet if you can afford it, this actually might be a good time to consider buying a house.

That might seem surprising. Home prices have soared since 2020 and mortgage rates have been rising steadily in 2022 — the average rate for a 30-year fixed mortgage was about 3% in January 2022, but today is about 7.08%. With inflation eating into earning power, real household incomes have been stagnant since 2019. The newest numbers from the National Association of Realtors for housing affordability, roughly measured as the ratio of an average mortgage payment to average incomes, won’t be out until Nov. 10, 2022. But the August report was grim, and I doubt the November affordability numbers will be any better.