Home > Mortgages > Should I Buy a Home Now or Can I Wait?

Comments 1 Comment

The Federal Reserve decided to forgo raising interest rates this September, but many economists still believe a hike is coming either in late 2015 or early next year. Once the central bank does decide to make its move, consumers should expect it to get more expensive to buy a new home.

In fact, the Mortgage Bankers Association is forecasting the average interest rate on a 30-year-fixed rate mortgage in 2016 will be 4.8%, up from a forecast of 3.9% in 2015 and 4.2% in 2014. The rate increases are just one small piece of the housing market puzzle. “Employment, household formation rates, and other economic fundamentals make a more significant impact” on overall market conditions, Mike Fratantoni, chief economist for the MBA, said in an email.

For example, housing prices are likely to rise next year, too, as improvements in the job market enable more people to purchase homes and deplete the current surplus of properties in many areas.

Overall, however, “it is true that if a consumer who is ready to buy a home can move now during a period of low rates, that consumer will see a benefit,” Fratantoni said. But that’s not to say the potential rate hike should expedite everyone’s housing search. There are also personal factors prospective homebuyers should consider when deciding to buy, he said.

Getting Ready to Move in (on a Mortgage)

Generally, consumers should be thinking about buying a home if they plan to stay in one place for at least five years and their financial house is in order.

Before you go out shopping for a mortgage, you may want to make sure you can meet down payment requirements, handle monthly mortgage payments and safely cover other ancillary costs, like real estate agent fees, property taxes, home insurance and repairs, to name a few.

You also want to be sure your credit score is in peak condition. Scores of 740 and over generally earn the best terms and conditions on a mortgage, so, if you fall below that line, you may want to work on improving your standing before filling out mortgage applications. You can pull your free annual credit reports each year at AnnualCreditReport.com or see your credit scores for free each month on Credit.com to learn where your credit currently stands.

Ultimately, if you decide you aren’t ready to move forward with a home purchase now, you shouldn’t feel too bad about the missed opportunity. “It is important to keep in mind that even after an increase, rates are likely to remain near these historical lows for the near term,” Fratantoni said.

More on Mortgages & Homebuying:


Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

  • Dennis Elliott

    Hi Jeanine,

    I am currently in the market for a home. I had my banker approve a loan for me before I even stepped out the door to start looking. Well, no, my credit score isn’t quite what you list as 740, but it was close enough for my banker to approve a V.A. home loan for me? We could have saved ourselves the wait, your site here has my score pegged perfectly? Go figure, eh? LOL!!!

    I am still hopeful enough to find something I like, and is in move-in condition, as that is a part of the V.A. loan approval. However, finding a home in move-in condition is very expensive, too expensive for me. I am on a fixed income due to a disability, and that is very NOT favorable to me! Plus, in my income bracket, I have to get my loan to cover every expense in purchasing a home. My banker says this can be doable? I hope he is right?

    So far, no luck finding a home? I will try to let you know how it all works out, if it does, that is? I have what my banker calls a great credit score for a loan, so hopefully soon? Wish me luck?

    Thanks for this incredible wealth of information on each and every type of loan! It has come in very handy, thank you!!!


Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team