Is it stupid to buy a house right now with 7% interest rates?

Real Estate

Everyone keeps telling me to wait for rates to drop. But Ive been waiting for 2 years already and prices just keep going up. My rent is ,100 and increases every year. Im 32, stable job, good savings. At what point do I just bite the bullet? Or is buying at 7% really that bad? People bought houses at higher rates in the 80s right?

Brittany Thomas

3 Answers

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Marry the house, date the rate.

Seriously though, heres my perspective:

Arguments for buying now:

If rates drop significantly, you refinance. You can change your rate, you cant change your purchase price.

Home prices historically dont drop much even in recessions

You've been paying ,100 in rent for 2 years = k gone

7% is historically normal, we just got spoiled by 2020-2021

Rates in the 80s were 12-18% and people still bought houses

Arguments for waiting:

If you can barely afford payments now, a job loss would be devastating

If youre not sure youll stay 5+ years

Reality check:
I bought in October 2022 at 6.75%. Everyone said I was crazy. House has appreciated k since then. If rates drop to 5% Ill refinance and save /month. But I locked in my price.

If you have stable income, solid savings, and plan to stay 5+ years, stop waiting. Perfect conditions dont exist.

David Jones

Bought at 7.25% in 2023 when everyone said wait. House has appreciated 12% since then. If I waited for lower rates Id be paying k more for the same house. You cant time the market for real estate.

Christopher Miller

The real question is can you afford the payment at 7%? If yes, buy. If youre stretching to afford it hoping to refi later, thats risky. Never buy based on what payments might be, only what they are.