If you’ve been watching the housing market over the past few years, you’ve probably wondered: Is now a good time to buy or sell? Should I wait? Are prices going to fall? Will interest rates ever come back down?

Forget Timing the Market—There’s a lot of noise out there—but the honest answer is surprisingly simple. Here’s the Only Metric That Tells You When to Buy or Sell a Home.

The best time to buy a home is when the monthly cost of owning is lower than the monthly cost of renting a comparable property.

No guesswork. No crystal ball. Just a straightforward comparison that tells you whether buying makes financial sense today. Let’s break down why this metric matters—and what it tells us about where the housing market is headed.

Why the Rent-vs-Own Comparison Is the Only One That Matters

When you buy a home, your true monthly “ownership cost” includes:

• Mortgage payment (principal + interest)

• Property taxes

• Homeowner’s insurance

• HOA fees (if applicable)

• A small allowance for maintenance

You then compare that total with what it would cost to rent a similar home in the same area.

If owning costs less than renting → buying is financially smart.
If owning costs more → waiting is usually the better move.

This approach cuts through the hype and focuses on real affordability—not market speculation.

Why Affordability Is So Out of Balance Right Now

To understand what’s happening today, it helps to zoom out.

Historically, homes have cost about 5× the median household income.

This ratio held for decades across most U.S. markets, indicating a stable, sustainable market.

Post-COVID, many markets are sitting around 10× median income.

In other words, home values have doubled relative to income.

That’s… not sustainable.

A price-to-income ratio that high means the average family cannot comfortably afford the average home. It also signals that the market is out of equilibrium.

Translation: There is plenty of room for prices to correct.

So, How Does Affordability Improve? Two Ways.

To get back to a housing market where owning a home is financially realistic, at least one of the following must happen:

1️⃣ Home Prices Need to Come Down

A drop in home values lowers the loan amount, which lowers monthly payments. Even modest price declines can bring costs back within reach.

2️⃣ Mortgage Rates Need to Fall

Interest rates are the biggest driver of monthly payments. A small rate drop—just 1%—can reduce your payment by 10% or more. Even if prices stay high, lower rates can restore affordability.

Most likely, the future will involve some combination of both price adjustments and rate relief.

Don’t Try to Predict the Market—Measure Affordability Instead

Nobody—not economists, not realtors, not the talking heads on TV—can perfectly predict:

• Where will interest rates be next year

• Whether home prices will rise or fall

• What the economy is going to do

But you can measure your own local affordability with one simple comparison:

Is my monthly cost to own lower than my monthly cost to rent?

This is the most grounded, reliable, and practical metric for deciding whether it’s time to buy.

A Simple Rule for Smart Buyers

Consider buying when:

• Owning costs less than or equal to renting

• You plan to stay put for 5+ years

• Your finances are stable

Wait when:

• Owning costs significantly more than renting

• The price-to-income ratio in your market is historically high

• Rates or prices look likely to soften

When affordability returns—and it will—the rent-vs-own calculation will be the clearest signal.

Bottom Line

The housing market may feel unpredictable, but your buying decision doesn’t have to be.

The right time to buy is when owning becomes cheaper than renting.

With home values currently far out of alignment with household incomes and interest rates still elevated, the market has room—and pressure—for a correction.

Keep your eye on the affordability metric, not the headlines. When ownership costs fall below rental costs, that’s your green light.

And if you plan to sell? Do the opposite.

If you’re a seller, the same affordability logic works in reverse. When owning is more expensive than renting, sellers are under pressure to lower list prices until the house is sold. In other words:
If you’re thinking about selling, timing matters—and as you’ve heard before, time is of the essence.