News & Trending Mortgage & Loans News

7 Valid Reasons To Put Off Buying a New Home Right Now

The next couple of months might be a good time to browse.

By Heather Bien

Edited by Chris Kissell

Updated Dec. 17, 2024

Buying a house can be a great way to build wealth. But, even with mortgage rates finally cooling, is it the right time to make your move?

Depending on your financial situation, it might be smart to wait until 2025 to buy a house. It could give you more time to get your financial ducks in a row. Doing so will let you approach the next chapter with more confidence that you can afford the house you want and take care of it.

In fact, if you fall into any of the following categories, it might be time to slow the house hunt and just enjoy the open houses for the decor inspiration — for now.

Steal this billionaire wealth-building technique

The ultra-rich have also been investing in art from big names like Picasso and Bansky for centuries. And it's for a good reason: Contemporary art prices have outpaced the S&P 500 by 136% over the last 27 years.

A new company called Masterworks is now allowing everyday investors to get in on this type of previously-exclusive investment. You can buy a small slice of $1-$30 million paintings from iconic artists, all without needing any art expertise.

If you have at least $10k to invest and are ready to explore diversifying beyond stocks and bonds,see what Masterworks has on offer. (Hurry, they often sell out!)

You are deeply in debt

If you’re drowning in debt, now is not the time to take on more. Debt — including credit card debt, car loans, and student loans — can place a major drain on your income every month.

Adding a significant new payment — one that may be more than your rent or existing mortgage — isn’t the way to move forward.

Instead, focus on paying off your debt and building your savings before taking the plunge into homeownership. Eliminating debt will free up money to help pay for your mortgage and cover other expenses.

Want to learn how to build wealth like the 1%? Sign up for Worthy to get ideas and advice delivered to your inbox.

You don't have an emergency fund

Many people head into homeownership thinking they’ve made the down payment and now they’re home free. Unfortunately, too many people find out that isn’t the case within weeks of moving in.

An unexpected roof leak, a broken air conditioning system in July, a refrigerator that’s finally given in — any of these expenses can be significant.

Plus, you or a partner could suddenly lose your job while still having a mortgage to pay.

For these reasons, it’s wise to have a six-month emergency fund on hand before you make an offer on a home.

You don't have enough for a down payment

If you haven’t scraped together enough cash for a sizable down payment, you might want to reconsider whether it’s time to buy a house.

While you can make an offer with a down payment as small as 5% or less of the purchase price, that’s not always ideal, as it will lead to higher monthly mortgage payments. Down payments of less than 20% often mean you have to pay primary mortgage insurance (PMI), which will add to your monthly payment.

That is why it can be wise to wait until you have a down payment of at least 20% saved up before going under contract.

Get a free stock valued between $5 to $200

Secret: You don't need thousands of dollars to buy thousand-dollar stocks or create a diverse portfolio.

Robinhood offers a method of investing called “fractional shares.” On its own, one share of a single stock could cost a lot of money, making it difficult to diversify. Robinhood allows you to buy pieces of stock instead, so you have the option to build a diverse portfolio quickly.

Let’s say you want to invest $250, as an example.

With that amount, you could build a relatively diverse portfolio with an investment of $50 in a big tech stock, $50 in a retail stock, $50 in an energy stock, $50 in a manufacturing stock, and $50 in a bank.¹ This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice. To get stock reward, new customers need to sign up, get approved, and link their bank account. Stock rewards shares cannot be sold until 3 trading days after the reward is granted and the cash value of the stock rewards may not be withdrawn for 30 days after the reward is claimed. Stock rewards not claimed within 60 days may expire. See full terms and conditions at <a href="https://robinhood.com/us/en/support/articles/open-account-pick-your-stock/">rbnhd.co/freestock</a>. Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement. Robinhood Gold is offered through Robinhood Financial LLC and is a membership offering premium services available for a fee.

Even better news? Add a Robinhood Gold membership, and you’ll get access to 4.25% (as of 11/15/24) APY² Annual Percentage Yield. Rate valid as of April 12, 2024. To earn interest, a cash balance is needed. If you have a margin balance, there is no cash balance to earn interest. Interest rates for cash sweep and margin investing can change at any time. Fees may reduce interest earnings. on your uninvested cash³ Interest is earned on uninvested cash swept from your brokerage account to partner banks. Partner banks pay interest on your swept cash, minus any fees paid to Robinhood. As of Nov 15, 2023, the Annual Percentage Yield (APY) that you will receive is 1.5%, or 5% for Gold customers. The APY might change at any time at the partner banks' or Robinhood's discretion. Additionally, any fees Robinhood receives may vary and are subject to change. Neither Robinhood Financial LLC nor any of its affiliates are banks. All investments involve risk and loss of principal is possible. Robinhood Financial LLC (member SIPC), is a registered broker dealer. and the ability to buy and sell stocks 24 hours a day, 5 days a week.

Open and fund a Robinhood account and earn up to $200 in stock

You don't think you can get an affordable mortgage

The general rule is you shouldn’t spend more than 25% or 30% of your take-home pay on a mortgage.

If you can’t get a mortgage within those parameters, you might want to wait until next year, when you’ll either have more money saved up or will have a higher income.

You believe mortgage rates will fall further

The Federal Reserve controls the federal funds rate, the interest rates banks charge each other. While changes in this rate do not directly impact mortgage rates, there is typically a correlation in the direction of the two types of rates.

This year, the federal funds rate began to move downward, and that trend is expected to continue into 2025. That could mean mortgage rates will head in the same direction.

Even a half-point drop in mortgage rates can have a significant impact on the size of your monthly mortgage payment. If you believe it’s likely that rates will continue to fall, you might want to wait to buy as the rates get lower and buying a house becomes more affordable for you.

You hope home prices will decline

In many markets, home prices have fallen from the highs of recent years. That is especially true of markets in the West and South that were red hot until recently.

There is no way to know for sure where home prices are headed in 2025. But if you think they are likely to fall, waiting a bit longer before buying might put you in a better position to snap up a great home at a bargain price.

Grow Your $$: 11 brilliant ways to build wealth after 40

You want more inventory to look at

Buyers typically want as many options as possible, so it can make sense to wait until 2025 if you think there will be more inventory on the market.

Spring almost always brings a bump in inventory. Holding off on buying this winter and waiting for the warm weather next year might make it easier to find your dream home.

Bottom line

One of the smartest homeowner moves is exercising patience. Buying in a hurry or making a move before you are ready rarely works to your advantage.

Instead, take your time. Crunch the numbers, shore up your finances, and buy a home when it makes sense for you. You’ll never regret waiting until you’re more financially ready — especially when you face that first big homeowner expense.

More from FinanceBuzz:

Invest in Paintings by Basquiat, Picasso, Banksy

Masterworks Benefits

Invest in art like a millionaire for a relatively low cost
Art investments have outperformed the S&P 500 by over 131% for 26 years
Purchase shares of artwork by top artists
Hedge against inflation and diversify your portfolio

Visit Masterworks