Should I Buy House

Get Pre-Approved. In the 2026 market, a pre-approval letter is your “ticket to entry.” It proves to sellers that a lender has already verified your income, assets, and credit. Without it, most sellers won’t even entertain an offer, especially in desirable school districts or high-growth corridors.

National headlines can be misleading. In 2026, some “Sun Belt” cities are seeing price corrections due to high inventory, while “Midwest” hubs remain highly competitive.

• Buyer’s Market: High inventory, homes sitting for 60+ days.

• Seller’s Market: Low inventory, homes selling in under 14 days. Work with a local agent to see if you have the leverage to ask for seller concessions (like the seller paying your closing costs).

While 6% is higher than the 3% seen in 2021, it is historically “average.” Many buyers in 2026 are choosing to “marry the house and date the rate,” buying now to avoid future price hikes and planning to refinance if rates dip into the 5% range in 2027 or 2028.

The mortgage is just the beginning. When preparing to buy, factor in:

• Property Taxes: These can rise 2–3% annually.

• Homeowners Insurance: Premiums have risen significantly in 2025-2026.

• Maintenance: Set aside 1% to 2% of the home’s value each year for repairs.

• Closing Costs: Expect to pay 2% to 5% of the purchase price in fees at the time of sale.

Lenders often use the “28/36 Rule”: your monthly housing payment (including taxes and insurance) should not exceed 28% of your gross monthly income, and your total debt payments should not exceed 36%.

• Example: If your household earns $100,000 annually ($8,333/month), your maximum monthly housing cost should be around $2,333.

Mortgage points are optional fees paid to the lender at closing to “buy down” your interest rate. In 2026, many buyers are using points to drop a 6.2% rate down to 5.7%.

Rule of Thumb: Only buy points if you plan to keep the loan long enough to reach the “break-even point”—the moment where your monthly savings surpass the upfront cost of the points (usually 5–7 years).

This depends on your “Time Horizon.”

• Rent if: You plan to move within 3 years, value mobility, or want to avoid maintenance costs. In 27 of the 50 largest U.S. metros, renting currently remains cheaper month-to-month than owning.

• Buy if: You plan to stay for 5 to 7 years. This allows enough time for home appreciation and equity building to outweigh the high upfront closing costs.

The “20% down” rule is increasingly a myth. While 20% eliminates Private Mortgage Insurance (PMI), the average down payment in early 2026 has dropped to around 15%. First-time buyers can often secure conventional loans with as little as 3% down, or FHA loans at 3.5%. However, remember that a smaller down payment means a larger loan and higher monthly interest costs.

Financial readiness isn’t just about having a down payment; it’s about your “Total Financial Picture.” You are likely ready if:

• You have a stable income source.

• Your Credit Score is ideally above 700 (to secure those sub-6% rates).

• Your Debt-to-Income (DTI) ratio is below 36%.

• You have an emergency fund separate from your down payment to cover 3–6 months of expenses.

Generally, yes, but with a “cautiously optimistic” outlook. Experts from Bankrate and NAR indicate that 2026 is a transition year. Mortgage rates have stabilized near 6%—a three-year low—and inventory has increased by roughly 12% compared to last year. While prices remain “sticky,” the lack of extreme bidding wars makes it a much more balanced environment for clear-headed decision-making.