5 Signs You Are Financially Ready To Buy a House in 2025

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Many people aspire to become homeowners. Buying a house establishes you in a neighborhood and lets you build equity with every mortgage payment. Eventually, you can pay off your house and become debt-free, making the cost of living easier in retirement.

Housing costs make this goal more challenging. It’s possible to build up your finances so you can afford a house someday, but you don’t want to rush into it, either. Wondering if you’re ready? These are some of the signs that you are financially ready to buy a house in 2025.

You Have Enough Money for a Down Payment

Ronald French, owner of French Investments, is a cash home buyer and real estate expert who bought his first home in 1993. He has remodeled, fixed and flipped numerous homes. He recommended building up your funds so you can make a bigger down payment.

“A down payment is essential, as it directly impacts your loan size, monthly payments and interest rate options. Ideally, you’ll want to save 10 to 20% of the home’s purchase price, though some loan types may allow lower down payments. A larger down payment often leads to better loan terms and helps build immediate equity in your home,” French explained.

However, you don’t want to see your bank account go to zero if you make a big down payment. That’s what Ryan Dossey, cofounder of SoldFast, a real estate brokerage and home buying franchise, believes.

“Folks often assume that they only need to have 3 to 5% saved up for a downpayment, but I would strongly consider also having 6 months’ worth of mortgage payments in reserves. This will help alleviate stress should there be any unexpected repairs or gaps in employment,” Dossey said.

You Have a Post-Purchase Budget

When you buy a house, your expenses will go up. You may have surprise expenses, such as home repairs, but you’ll also have the expected monthly costs of homeownership. 

“Having three to six months of expenses set aside can give you peace of mind if unexpected costs arise. It’s also helpful to have a post-purchase budget in place for home maintenance and repairs, which are inevitable expenses. With this savings cushion, you’re better positioned to handle the responsibilities of homeownership without financial strain,” French explained.

You Are Willing To Cast a Wide Net

A more flexible approach with where you live and which types of houses you buy can make homeownership more feasible in 2025. Dossey predicted fixer uppers will show up more often in the market and that can present a great opportunity for some people.

“I would expect homebuyers to see an increase in fixer-upper inventory as sellers lower their asking prices and more properties are sold at auction,” he said. “If you qualify for a mortgage and don’t mind some sweat equity, it’s possible to get a great deal.”

“​​I wouldn’t be shy about making offers below the listed asking prices either. We’re seeing an uptick in sellers with listed properties requesting we buy them for cash at a discount.”

There is no perfect time to buy a house. Based on the data we have today, I would get the best deal you can,” Dossey added.

Moving further away from a big city can also lead to more attractive prices. French explained the growing demand for suburban and exurban areas will continue in 2025. Researching properties in these areas can also lead you to more affordable homes.

“Remote work has shifted demand toward areas outside major cities and this trend is likely to continue,” he said. “Suburban and exurban locations offer more space, nature access and often a lower cost of living. This is ideal for those looking for a flexible lifestyle while maintaining access to urban amenities.”

You Have a Stable Income

When you take out a mortgage, you’ll have that fixed monthly expense for up to 30 years. Homeowners also have to pay other regular costs, like property taxes and maintenance. That’s why French and Dossey both recommend that aspiring homeowners have stable incomes before buying homes.

“Consistent income is a key indicator of financial stability. If you’ve maintained stable employment with a steady income, this is a positive sign you’ll be able to handle monthly mortgage payments. Lenders review your income history to assess your ability to manage payments over time, which provides security in taking on a home loan,” French said.

Lenders will look at your financial history, but it’s also good to check in with your employer. Dossey explained why.

“Most lenders want to see two years of employment in the same field, but I personally also recommend requesting a performance review with your employer,” he said. “It’s a good idea to know where you stand before signing yourself up for 30 years of mortgage payments, especially if you’re draining your savings.”

If your employer likes your performance, then you know that you’re less likely to get fired shortly after buying your home. 

You Have Good Credit

You need a good credit score to get the best deals, especially if you want traditional financing. You can get a property with a 500 FICO score if you make a 10% down payment on an FHA loan. 

However, you’ll need a much higher score to make homeownership more attainable. Dossey explained what number to go for.

“Credit scores around 660 will get you an average mortgage rate. This is referred to as ‘prime’ and reflects rates between 660-719. Rates above 720 are referred to as ‘super prime’ and likely qualify you for the best rates possible,” he said.

“If your credit is 620 to 659, you’re in the ‘near prime’ category and will pay more than the national average,” he added. “If you’re between 580 to 619, you’re subprime and it’s going to be expensive and tricky to qualify. If you’re near the edge of a tier, it might be worth working to ‘bump’ up your scores.”

French also advocated for building credit while mentioning how the debt-to-income ratio can also impact your options.

“A credit score in the mid-700s or higher will help you qualify for better mortgage rates, reducing your monthly payments and saving you money over time,” he said. “Additionally, a DTI ratio below 36% shows lenders that you’re managing debt responsibly, which makes you a favorable candidate for a mortgage. Together, these factors show that you’re prepared to take on the financial responsibility of a home.”

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