Should You Buy a Home Now? 7 Myths, Debunked

You've probably typed something like this into Google: "Should I buy a house now or wait?" And you got back a swamp of conflicting advice. Let's cut through it. The honest answer: if you're financially ready and plan to stay put for several years, buying is still a solid move—but you need to ignore the fairy tales. Here are the questions real buyers ask, answered with real numbers and a blunt dose of reality.

Do I really need 20% down?

No. That's the biggest myth in home buying. Conventional loans start at 3% down, and FHA loans go as low as 3.5% with a credit score of 580 (Bankrate). If your credit is between 500 and 579, you can still get an FHA loan with 10% down (FHA/HUD). For veterans, VA loans offer 0% down, and USDA loans do too for eligible rural buyers (Bankrate). The catch? Put down less than 20% on a conventional loan, and you'll usually pay private mortgage insurance, or PMI (Bankrate). But PMI isn't the end of the world—it's a temporary cost until you build equity. So don't let the 20% myth keep you renting forever.

Is PMI just throwing money away?

It can be, but only if you never cancel it. Here's the thing: PMI protects the lender, not you (CFPB). But the Homeowners Protection Act gives you the right to request cancellation once your equity hits 20% of the original value, and your lender must automatically terminate it at 22% (CFPB). So it's not permanent—if you track your payments and home value, you can ditch it. The real waste is paying PMI for years after you've reached that threshold because you didn't ask. Set a reminder on your calendar the day you close.

Are closing costs really that big a deal?

Yes, but they're manageable. Closing costs typically run 2% to 5% of the purchase price (Bankrate). On a $400,000 home, that's $8,000 to $20,000—not pocket change. But you can negotiate: FHA loans allow sellers to contribute up to 6% of the purchase price toward your closing costs (FHA/HUD). That can cover a big chunk. And remember, by law, your lender must give you the Closing Disclosure at least three business days before closing (CFPB). Use that time to check every line item. Don't let anyone rush you.

Should I buy points to lower my rate?

Only if you plan to stay long enough to break even. A point costs 1% of your loan amount and typically lowers your rate (CFPB). On a $300,000 loan, one point is $3,000. If it saves you $50 a month, that's 60 months—five years—to break even. If you might move in three years, skip the points. But if you're settling in for a decade, they can save you thousands. Also, lenders may offer credits that reduce closing costs in exchange for a higher rate—compare both scenarios (CFPB).

Are ARMs too risky?

Not necessarily, but they're not for everyone. An adjustable-rate mortgage starts with a fixed period—often 5, 7, or 10 years—then adjusts periodically (CFPB). The fear is that your rate will skyrocket, but ARMs have rate caps that limit how much the rate can change at each adjustment and over the life of the loan (CFPB). For example, a 5/1 ARM might have a 2% first adjustment cap and a 5% lifetime cap. If you're sure you'll move or refinance before the fixed period ends, an ARM can save you money. But if you're risk-averse or plan to stay forever, a fixed-rate loan is safer. Right now, the 30-year fixed averages 6.67%, and the 15-year is 5.96% (Freddie Mac). If you can handle a higher payment, a 15-year fixed builds equity faster.

Is buying always better than renting?

No. The CFPB says buying builds equity, but it's not right for everyone—renting offers flexibility and no maintenance headaches (CFPB). The math is personal. If you expect to move in a few years, buying could lose you money because of closing costs and the slow start to equity. But if you're staying put, owning is a forced savings plan. Consider this: the median net worth of homeowners is $396,200, while renters' median net worth is $10,400 (Federal Reserve SCF). That's a staggering gap. But don't buy just for the numbers—buy because you're ready to commit to a place.

Is now a terrible time to buy?

No, but it's not a steal either. Home prices are flattening—annual appreciation was 0.0% in April 2026, the eighth straight month below 1% (First American). In Q1 2026, the national median single-family home price was $404,300, up just 0.5% year over year (NAR). Some areas are falling: the West saw a 2.9% decline, while the Northeast rose 4.9% (NAR). So there are deals if you look in the right places. Inventory is still tight—a 4.6-month supply in July 2026 (NAR). And builders are feeling the pinch: 35% cut prices in August 2026, by an average of 6% (NAHB HMI). That could mean more negotiation room on new construction.

Quick tip: Before you even tour homes, get pre-approved and know your debt-to-income ratio. Most lenders want it below 43%, and under 36% is better for stability (Bankrate). That number will tell you what you can truly afford.

Here's the bottom line: ignore the hype. You don't need 20% down, PMI isn't forever, and buying now isn't crazy—if you're ready. But don't rush. Crunch the numbers, understand your market, and make a decision based on your life, not on fear.

Sources

• Bankrate - https://www.bankrate.com/mortgages/how-to-buy-a-house/
• FHA/HUD - https://www.hud.gov/program_offices/housing/sfh/ins/203bfaq
• CFPB - https://www.consumerfinance.gov/ask-cfpb/what-is-private-mortgage-insurance-en-122/
• Freddie Mac - https://freddiemac.gcs-web.com/news-releases/news-release-details/mortgage-rates-average-667
• First American - https://www.firstam.com/news/2026/seasonal-uptick-house-prices-near-peak-20260528.html
• NAR - https://www.nar.realtor/press-releases/home-prices-increased-in-71-of-metro-areas-in-first-quarter-of-2026