Timing the market is hard, especially when you’re making one of the biggest financial decisions of your life. And let’s be real, who has cash to spare these days? 

Whether you’re a first-time buyer hoping to lock down a mid-century modern masterpiece or a real estate investor looking for a new hot property, there are indicators when it’s a good time for you to invest. 

In this article, we’ll explore how you can decide if now is the “right time” to invest in real estate, what you should consider before making a purchase, and what the market looks like today. 

What’s the Real Estate Market Doing Today?

In 2025, homeowners have seen a cooling of the U.S. national home price index (a measure of average home price growth across the USA), which showed a 1.8% annual gain, down from 4.6% the prior year. But what does this slowdown mean for potential buyers?

It could mean now is the time to strike and snag a home while you can find deals on the market. Real estate is very dependent on regional, local, or city pricing, though. These hyperlocal prices affect the market, and depending on where you’re looking to buy, prices may still be high. 

Many markets, such as New York, Boston, and San Francisco, may face housing shortages that drive up prices. Meaning you’ll need a larger down payment or a higher-paying job to afford real estate. 

But those living outside hot markets may be able to find deals on property.

Current Mortgage Rates and Downpayment Expectations

According to the Federal Reserve Bank of St. Louis, the 30-year fixed-rate mortgage average is 5.98% as of February 26th, 2026. While this average has fluctuated over the past five years, the rates have typically ranged from 5% to 7%. 

When buying a home, it’s not just mortgage rates you’ll need to contend with. You’ll also have to make a down payment. As of 2025, the median down payment was 19% for all buyers. This split was 23% for repeat buyers and 10% for first-time buyers, the highest median down payment for first-time buyers since 1989. It’s also the highest for repeat buyers since 2003.

What does that mean for buyers? You’ll need more access to liquid assets if you want to invest in real estate. 

What Factors Should You Consider Before Investing in Real Estate? 

Purchasing a home involves more than simply having enough money to cover the down payment. Here’s what to consider: 

Personal Considerations

1. Access to Liquid Assets (for a Down Payment)

Unless you qualify for down payment assistance, you’ll have to pay for the down payment with your own money. Many investors save for years to afford a down payment, and some choose to tap into accounts like a 401(k). Speak with a financial advisor before making big financial decisions, though, especially if you have plans to retire early or reduce your workload. 

We recommend checking your state or local programs for down payment assistance loans or grants, which are often available to first-time buyers.  

2. Financial Stability 

Think you’re ready to invest in real estate? Then, financial stability is a must. It ensures you can make mortgage payments over the long term. 

Financial stability may look different depending on your household. Some homeowners take out life insurance policies to cover a mortgage or keep their emergency fund stocked, while others work steady jobs in industries where there’s very little job loss. 

Note: If you do lose your job or experience financial struggles, you can contact your lender to explore forbearance or a grace period for late payments.  

3. Renting vs. Buying Estimate

Determine if buying real estate is cost-effective before taking the plunge. For example, renting is often more affordable for those living in one location for five years or less, though this can vary by market. 

Calculate the cost of renting vs. buying for a personal estimate and find out which option is better for you. 

4. Your Credit Score 

Credit scores impact your ability to secure a better mortgage rate. People with higher credit scores are typically eligible for better mortgage rates, but this may vary by financial institution. 

Have a low credit score? You may end up with a higher interest rate for your mortgage. 

Market Considerations: 

These are unrelated to your personal finances and often tied to factors outside your control. 

1. Interest Rates

A good interest rate on a mortgage can make or break your decision to invest in real estate. You can track 15- or 30-year average mortgage interest rate data from the Federal Reserve Bank of St. Louis to determine when a “good time” to buy is, based on interest rates. 

2. Regional Pricing 

Real estate prices and markets vary by region. While some markets stay hot with median home prices above $1,000,000, other areas are more affordable at less than $150,000. 

Use data from the National Association of Realtors' median home prices and mortgage payments by county list to determine average housing prices in your desired area and decide if a home is worth the listing price.  

3. Value of the Property 

Home value can change after purchase. Unlike a car, which loses value immediately after driving off the lot, home prices are at the mercy of changing interest rates and other market factors. 

Consider how it would affect your finances and lifestyle if you invest in real estate and the property immediately lost value. How much would this impact you? 

4. Overall Real Estate Market 

If the real estate market isn’t looking too hot overall, it may not be a good time to buy. You’ll have to decide this for yourself and consider your personal situation because if there’s a dip, you could take advantage of it to get a deal on a house. 

How to Determine if You’re Ready to Invest in Real Estate 

Signs You’re Ready to Invest‍

You’ve saved a down payment (way to go!)

You’re financially stable

You have job security

You can afford maintenance/upkeep

Signs You’re Not Ready to Invest 

There’s potential for job loss or insecurity

You have high debt (car, credit cards)

You haven’t researched your target market or neighborhoods

You aren’t preapproved for a mortgage 

Consider your situation before making major financial decisions, like investing in real estate.