Bonus question: what IS actually a good time vs. a bad time to buy a house, if that is an actual thing?
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If interest rates are low and prices are low, then it is a great time to buy a house. You are getting lots of house for the bank’s money and the bank’s money is cheap to rent.
If interest rates are high and prices are high, then it is a bad time to buy a house. You are getting less for the bank’s money and they’re charging you an arm and a leg to rent it.
If interest rates are high and prices are low, then it is a good time to buy a house WITH CASH. You have less competition to buy your house and you’re not borrowing any money so you don’t care about interest rates. The competition is less because most people don’t buy houses with all cash unless downsizing, moving to a cheaper state, or are significantly wealthy–they care about the interest rates.
If interest rates are low and prices are high then it MIGHT be a good time to buy, but it could be 2008.
It’s actually considerably more complex than this because someone buying a house requires someone to sell a house. And for non-new units if you sell your house you’ll need to find another one.
When you have few houses for sale, but a lot of people wanting to buy a house (this has been the SF Bay area state for the last few years until very it is a horrible experience trying to buy. Houses generally go over list price and you’ll they’ll have multiple offers who compete to give more money and less favorable terms in order to “win” the house. Unless you really overbid, you are likely to lose out on several houses you make an offer on.
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