Should I buy a house in 2024?

Using a Mortgage Calculator to Determine the Impact of Rising Mortgage Rates on Your House Payment

At the end of 2021, the average 30-year fixed mortgage rate was just above 3%. In just two years, mortgage rates are closer to 7.5%.

If you're buying a house, that is not the most welcome of trends. However, neither you nor I nor we can do much about that.

Of the three factors that go into how much your mortgage payment will be - loan amount, loan term, and interest rate - the interest rate remains the one of which we have the least control. Sure, we can shop around to save a fraction here and there, but unfortunately, "rates are rates" is more than a quote I just made up.

Using the 3% to 7.5% rate jump over the last few years, a 30-year, $500,000 loan is $1,388 MORE now than it was in late 2021. So yeah, rate matters. We won't pretend it doesn't.

So what to do about it? There are countless TikToks and whatnot out there stoking fear and telling you what to do. That fact is the market is what it is, and you have to make a choice.

• Buy a House
• Don't Buy a House

As much as we'd like to think we make decisions objectively and with reason, we rarely do. Why else do I have a $35 pair of socks?

People buy homes for all kinds of reasons, least of which is perfect market conditions.

Option 1: Buy a House

It is true. If your payment budget is x-amount, your price range is lower today than it was pre-covid. We can whine about that or deal with it. If that new price range means homes that don't meet your standards, whether in quality, location, size, whatever, then proceed to option 2.

If your new price range still includes homes that match your lifestyle requirements, terrific.

But rates and prices are high, why would I buy now?

Trying to time the market, eh? Good luck with that.

We have no idea what the future holds. If you want to buy a house now, don't let an internet video stop you from doing so. If you want to wait, that's fine, too.

Rates might go up. Rates might go down. Home values might go up. Home values might go down. Although let's hope that last one minds its business.

So, if you buy a house now and rates go up, congrats! You have a lower rate than if you had waited.

If you buy a house now and rates go down, you might be able to refinance. Stressing "might", refinancing isn't a given. But as long as things don't get crazy, it should be an option.

If you buy a house now and prices go up, congrats! You paid the appropriate price for your new home, and it appears to be appreciating.

If you buy a house now and prices go down, well, this one isn't ideal. However, as long as you have no plans to move and you didn't make this purchase as a speculative investment, this shouldn't matter much in the long run. Sure, maybe you could have paid less if you timed it just right. Regardless, you now own a home.

Option 2: Don't Buy a House

There is nothing wrong with renting. Owning a home is not for everyone. And if it is for you but current market conditions have other plans, then it'll have to wait.

Higher interest rates have made renting the default option for more and more potential homebuyers. That's an unfortunate reality that includes the side effect of driving rent prices up.

Whether buying or renting, housing has never been more expensive. However, you have options. We've built the tools and mortgage calculators on What's My Payment to present those options and make navigating this market more bearable.

Whichever option you choose, we are here to help.