7 Signs Buying a House Is Right for You

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To buy, or not to buy? That is the question. Keep reading to learn whether becoming a homeowner might be right for you. 

Despite what folks of an earlier generation may tell you, buying a home isn’t your only path to wealth. While it’s true that becoming a homeowner can have that effect (and it’s also one of the ways generational wealth is passed down), you can still save and invest money for your future if you rent.

That said, there are other excellent reasons to buy — getting a stable place to live with predictable monthly payments (for your mortgage, at least) being chief among them. If you’re thinking about taking the plunge, here are some signs the time is right for you to take out a mortgage and buy a home.

1. You’ve truly reckoned with the costs (all of them)

Owning a home is expensive. It’s easy to think that if you can afford a mortgage payment, you can afford a home, but don’t count on this. If you’ve actually looked at your total costs (in as much as you can estimate them, that is), which include property taxes, homeowners insurance, and maintenance, and have determined you can handle them, then buying might be right for you.

2. You have emergency savings

Remember all those costs we just discussed? Are you ready to pay them? While no one can predict the various problems that could crop up with a house (although, getting an inspection before you buy can certainly point you in the right direction), having cash saved up can help you cope. Going into debt the first time something breaks at home would really stink, so aim to have three to six months’ worth of savings (in the form of an emergency fund) before you buy a home.

3. You have cash for a down payment and other buying costs

Yes, you need even more money to buy a house! A mortgage lender will be a lot more willing to offer you a home loan if you have a solid down payment. A 20% down payment is recommended (and can help you avoid paying for mortgage insurance on a conventional loan), but isn’t necessary — just remember that the more you put down, the smaller your payments will be. And other money goes into buying a home, in the form of closing costs. Plan and save for these, and go into a home purchase with confidence.

4. You’re settled in your area

It’s best to look at buying a home as a longer-term commitment than you may be used to as a renter. For example, I recently lived in three different rental properties in less than a year, and buying/selling three homes in less than a year would be a losing financial proposition. As such, don’t buy a home unless you plan to stay put for at least five years. If you love your area, want to stay for a while, and can afford a home there, you’re well-positioned to buy.

5. You’re not being pressured into it

Your older relatives who think you should buy a home may mean well, but they probably don’t understand that the world is different now. Housing costs rose 74% from 2010 to 2022 — while the average wage increased only 54% in that same timeframe. If your desire to own a home is coming from within, rather than as a result of pressure from family or friends, you might just be in a good place to buy a home.

6. You’re ready to take care of a home — financially and otherwise

Depending on your landlord, you might not have to lift a finger or whip out your credit card when something goes wrong with your rental home. That is what you’re paying for when you pay rent — the peace of mind that comes from knowing you don’t have to pay to fix a broken hot water heater or remediate a wasp infestation.

Guess what, though? Once you own a home, those problems are yours. And even the non-catastrophes that come with a home fall on you — better clean out those gutters and take care of the landscaping. If you’re ready for this, it could be a good time to buy a house.

7. You can be realistic about this housing market

This is a tough market to buy in. Unfortunately, you’ll be dealing with higher mortgage rates on top of a limited supply of homes for sale (which makes sense — people who have mortgages at 3% aren’t chomping at the bit to sell and take on a new mortgage at 7% or higher). You won’t have a ton of homes to choose from, and competition will likely be fierce. If you understand this, you’ll be in a better position (at least emotionally) than someone who assumes they’ll be able to easily buy their dream home for a great price right now.

Buying a home isn’t something to be taken lightly. If most (or ideally, all) of the signs above apply to you, you can feel better knowing you’re buying for the right reasons and with your eyes wide open about all that’s involved.

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