Ask HN: Is it the “worst” time to buy a house?
I just bought a house! Like, literally yesterday. And I was recently quoted in the Wall Street Journal regarding my home buying process: <a href="https:&#x2F;&#x2F;www.wsj.com&#x2F;articles&#x2F;home-buyers-are-finding-creative-ways-to-make-cash-offers-11654767001" rel="nofollow">https:&#x2F;&#x2F;www.wsj.com&#x2F;articles&#x2F;home-buyers-are-finding-creativ...</a><p>Someone in the comments there made a metaphor about &quot;catching a falling knife.&quot; I respect this skepticism, and suspect I may have safely caught such a knife. More thoughts:<p>- If interest rates rise, the asset price bubble may deflate. This suggests the house&#x27;s value on paper will fall — but unless the economy collapses, overall rents ought to be stable, and the cost of living on a typical property ought remain broadly similar. In the meantime, prices are still rising substantially in the area where I bought the house, notwithstanding recent headwinds in the mortgage market.<p>- I expect real rents to rise over the next few years, due to general supply-and-demand issues and the dearth of new construction. I expect this nationwide; I further expect them to rise in the city where I bought. This should mitigate the pressure on the value of my asset.<p>- I locked in a 4% interest rate. With a conforming loan of $647,200 that&#x27;s something like $2200&#x2F;mo in debt that&#x27;s evaporating due to inflation. This is a substantial portion of the monthly payment. You will not get this good a deal, because rates are already going up. However, at current rates, you will still get free-money financing -- just not as much or for as long.<p>- I sold stocks to pay for my down payment. The stock market fell a good little bit since I sold. If your equity is still in equities you have already taken a hit that I avoided. (I got lucky, I guess; I also sold company stock at a very attractive price.) And note that even though stocks have fallen, they are by many measures still somewhat overpriced by historical standards, particularly if rising rates brings about a recession, which it might. If my real estate is at risk from rising rates and falling asset prices, it has lots of company. (Even a nice safe bank account is losing value daily.)<p>In conclusion, a lot depends on the specifics of where you&#x27;re buying, how you&#x27;re paying for it, and what you would do with the money instead. If you&#x27;ve got a wad of cash and wanted to make an all-cash offer, I&#x27;d preserve as much as you can against inflation, and save it for the recession in a year or two; you&#x27;ll probably come out ahead.