Should I Buy a House Now? [What to Know About Buying a House]


The last two years were difficult, especially when it comes to making big, long-term decisions, such as changing a house.

If you had plans to buy a house before or during the pandemic, how many times have you asked yourself “should I buy a house now or wait for better times?”

We hope this article will make it easier for you to make a decision, so keep reading.

An Overview of the Real Estate Market in 2021

Let’s have a look at the overview of the real estate market in 2021, to see what to consider and what to expect when buying a house.

Historically Low Mortgage Rates

Due to various factors, mortgage rates for 30-year fixed loans have been subject to highs and lows from 1971 to 2021.

Buying a home is more affordable when mortgage rates are lower because a lower mortgage payment can help you afford a more expensive home. Throughout the rest of 2021, mortgage rates are more likely to rise than fall. A survey showed that in 2021, the 30-year fixed-rate mortgage will average around 3.38%.

Bigger Home Buying Budgets

Low rates have been helping buyers by leaving them with bigger home-buying budgets. However, since the beginning of 2021, mortgage interest rates have been on the rise. Changes in the mortgage rate directly impact a buyer’s budget.

Mortgage rates are still low, but their rising will impact the price of a home a buyer can afford and probably the average down payment on a house as well. The smartest way to buy a house is to check out the mortgage options sooner than later.

Higher Home Prices

Due to higher demand, there are not enough houses, so home prices have recently hit a new record. In February, home prices increased by 12%, which is the biggest jump since 2006 ($35,000 profit for a median-priced home).

According to Lawrence Yun, (chief economist for NAR) “homes are selling faster than ever before”.

The question remains, should you buy a house?

Many homebuyers are afraid of missing out on the opportunity, that’s why they are prepared to pay higher prices.

Fewer Houses for Sale (Tight Inventory)

According to the National Association of Realtors (NAR), in December last year, the number of homes for sale reached a record low with 1.07 million properties on the market nationwide.

California, New Hampshire, and Ohio are just a few states on the list of the hottest real estate markets in 2021 with the highest housing demand. Still, there are a lot of people asking, “is it safe to buy a house right now?” The real answer is – “it depends”.

DID YOU KNOW: Homes were sold in a median of 11 days in January 2021 in the D.C. region, which was 15 days faster than in January 2020.

Reasons for the High Housing Demand

Even though it is a period of recession in the United States due to the COVID-19 pandemic, the demand for houses is higher than ever.

There are a lot of other reasons why you should buy a house, let’s go through some of them:

Remote Jobs

At the beginning of the pandemic, many companies switched to temporary work from home, however, as time passed more and more companies incorporated remote work as a long-term strategy. The huge number of Americans working remotely affected how and where they want to live.

While spending most of the time at home during the pandemic, remote workers started searching for a place that is multifunctional. Many started wondering, “Should I buy a bigger house to accommodate a home office?”

To Be Nearer to Their Family

This is a very common reason for people to move to another house. For many people, it is very important to be closer to their family. As people grow old, many prefer to be near their children and grandchildren.

To Reduce the Cost of Living

It’s obvious that different areas have different living costs. Living in New York City and living in Landisville, Pennsylvania is two very different things. NYC is a notoriously expensive city, so not everyone can afford the living costs there. Before you decide to buy a house, do research on why you shouldn’t buy a house in some areas – perhaps they’re too expensive or not safe.

To Avoid Crowded Places and Cities

During the pandemic, this is the most common reason for the increased housing demand. Many people are wondering, “is it smart to buy a house right now?” because they want to get away from crowded places and find a place where they can live more peacefully.

DID YOU KNOW: From 8,500 people surveyed, 65% responded that they would move or would think about moving if they got a permanent remote job.

Key Takeaways

The most common question during the pandemic: “is it smart to buy a house right now”?
You need to consider the correlation between demand and supply when purchasing a house.
When you want to buy a house, consider the 5-year rule.
You must have a secure job if you want to buy a house.
Having a remote job is the most common reason for home buying.

What to Consider When Buying a House?

A new house is not something that you can change your mind about tomorrow and replace with another one. First, you need to make up your mind about whether you really need it and what the process involves.

These are the most important things you should consider before buying a house:

The Correlation Between Demand and Supply

The correlation between demand and supply affects the prices of goods and services. In the case of real estate demand and supply for 2020 and 2021, here’s how they affected each other:

Low mortgage rates motivate people to buy a home and increase the demand

When the mortgage rates are low, people are motivated to buy a new home because it’s more affordable. They can take out a low-cost loan, and those with existing mortgages may attempt to refinance their mortgage.

If you are asking can there be low rates and low demand at the same time? – Yes, it is possible, but it is an indicator of a struggling economy. For instance, this situation happened during the Great Recession. So there are a lot of factors to consider when buying a house.

High demand but low supply elevates the prices

The low mortgage rates make loans more attractive for borrowers causing more people to grasp the opportunity and buy a house. This means the prices of homes heavily depend on how high or low the demand and the supply are. More demand – higher prices, more supply – lower prices.

Your Readiness to Buy a House

If you want to buy a house, you need to consider more things than just your finances. Let’s check the most important ones:

Do you need the house long-term or short-term?

When you are purchasing a house, you need to be sure that you won’t change your location for at least 5 years. If you move out in less than 5 years, you will most likely take a hit financially. You should think twice, is buying a house worth it for just a year or two?

Your personal finances (savings, credit, and debt)

What else do you need to know when buying a house? It’s a good idea to know whether you have enough liquid capital because unexpected expenses can often accumulate. You should check your credit score which will help you determine your financing options. Lenders use your credit score to predict whether you’re able to repay your mortgage. Good credit history will increase your chances of securing loan repayment at low rates and convenient terms. A large amount of credit card debt can affect your ability to qualify for funding when seeking a mortgage.

Your job security

How secure your job is and the income you have is the most important factor when qualifying for a mortgage. It doesn’t matter if you have the highest credit score. If you don’t have a documented income, you can’t qualify for a mortgage.

Also, this tells you that you should know when not to buy a house. If your job is insecure, you can’t take such a risk.

The Buying Process

When you are buying a new house, there is a process you need to go through from finding a house you like to seeing it in person and closing the deal. But even though there are many people who make offers on houses without seeing them in person, it is highly advisable to check out what you are about to buy.

Nowadays even real estate is going online. If you are unable to see the house in person, you can hire a real estate agent who will show you the property virtually. Then if you are satisfied, you can sign a deal.

Every real estate agent should offer you to see the property virtually, in person, or both. It is up to you which way suits you best. There are a few more factors to consider when buying a house, which I will discuss in the sections below.

The Area You Are Interested to Buy a Home in

When you buy a house, it is very important to be satisfied with the area where the house is located. You will probably spend many years there, so search the area thoroughly. Visit the local pubs, shops, and parks, and make sure that you are happy with the surroundings.

You should also compare current housing prices in the area to the prices during the previous years to find out what is the average price of a house in your target area. If it is higher, is buying a house worth it? What does the area have to offer? Another factor that may influence the price is new construction. If there are many housing starts in the area, it is likely that they will expand the inventory and perhaps lower the prices.

The Fees Associated With a House

Wondering how to know when to buy a house? You will know when you’re well informed about the fees associated with the house you are buying because there are a couple of them.

Lender Origination Fee

This fee is paid to the lender or the bank for their services in creating the loan application. Loan origination fees are generally between 0.5% and 1% of a mortgage loan in the US.

Mortgage Points (Optional)

When buying a house, these mortgage points are optional fees that you can pay a lender to reduce the interest rate on a mortgage. This is also called “buying down the rate”. If you buy one discount point, you’ll pay a fee of 1% of the mortgage amount, and the lender reduces the interest rate by 0.25%.

Prepaid Property Taxes and Homeowners Insurance

When deciding to buy a house, you need to be prepared for all of the upfront expenses.

The upfront payments that the homebuyer pays at closing for certain mortgage expenses before they are technically due are called prepaid.

The mortgage lender gathers 6 to 12 months of homeowners insurance, which it will then pay to the insurer. Also, the lender estimates how much property tax you will owe and asks for 2 months’ worth of property taxes upfront at closing to build a reserve for when these payments become due.

Inspection Fees

You need to meet all the requirements to buy a house. This cost is charged by the licensed inspector ahead or at closing. It can include special inspections, for example, for termites or pests.

Appraisal Fees

Usually, the buyer also pays a fee to the appraiser at closing to determine the value of the home.

Title Fees

Based on the loan amount as well as the home’s value and geographic location, title fees can vary widely. In some areas, the seller pays the owner’s title insurance for the buyer, while the buyer pays the lender’s policy.

Homeowners Association (HOA) Fees

These types of fees vary depending on the type of home you are buying, where you live, and what your HOA offers. A monthly HOA fee could be more than $1,000 or less than $100.

You may be able to negotiate some of these fees with your lender

Perhaps the smartest way to buy a house is to negotiate and save up more money.
Not all of the fees are negotiable but some of them can be. The fees that you can negotiate are the following: homeowners insurance, title insurance, discount points (lender credits), origination/underwriting fees, application fees, rate lock fees, and real estate commissions.

DID YOU KNOW: A bedroom can add from $10,000 to $25,000 to an appraisal, depending on the size of the bedroom and the overall value of the home.

Should I Buy a House Now or Wait?

Knowing more about the fees and terms will help you make up your mind and decide properly. However, you can always consult a professional advisor and make an informed decision for the next step.

DID YOU KNOW: The Los Angeles-Long Beach-Anaheim area in California is the most unaffordable area to live in. When factoring in median income, only 12.7% of the properties are affordable to the average household.


Hopefully, this guide will come in handy and will help you make up your mind when deciding to buy a house.

Just remember that you don’t have to rush, once you choose a house you need to be sure that it is the right one for you.


How hard is it to buy a house?

According to the National Association of Realtors, for 60% of the homebuyers, aged 29-38, finding the right property was the hardest part of buying a home.

Where to buy a house?

“Should I buy a house?” and “Where?” are two questions that only you can have the right answers to. Depending on what kind of surroundings you prefer, it is advisable to spend some time in that area and to find out if you like it.

Can 3 people buy a house?

Yes. However, keep in mind that some lenders will only allow this if all the applicants are relatives.


Alex is an IT wizz gone SEO gone fire-juggler. We’re not even joking. When he isn’t researching why one personal loan is better than the other and which piece of hardware you should buy next, he’s rollerblading or selling homes (because he does that, too, the smarty-pants).

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