Can i rent out my house without telling my mortgage lender reddit

There’s a reason why the phrase “timing is everything” doesn’t make us cringe quite as hard as other real estate cliches. (We’re looking at you, “location, location, location.”) Here’s why: It’s accurate. Homebuyers are always trying to time the real estate market so they can make the best possible deal—and it’s often difficult to do.

Time is the common thread between questions about mortgage rates (Should I lock in my mortgage rate now before they rise in a month’s time?), housing inventory (Should I put off buying until next month to see if there are more houses for sale?), and even relocating (Should we buy now so we can move before the new school year starts?).

At the current moment, homebuyers face a perplexing mix of realities: mortgage rates are still up and inflation is still putting pressure on everyone’s bottom line, but the median listing price actually fell (yes, fell) to $435,000 in August, down from an all-time high of $450,000 in June.

So with all these question marks in the air, it’s hard not to wonder if it would be downright foolish to buy a house right now, or if the timing is actually good.

This week we clocked a particularly interesting discussion floating around on the r/RealEstate subreddit after one user posted the following question point-blank: “I was just told it’s the single worst time to buy real estate in U.S. history. How far off are they?”

Reddit users chimed in with a variety of entertaining hot takes and personal anecdotes on the matter.

“That person wasn’t alive in 2007 I guess.”

—BDvanillaflav 

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“Nope, six months ago was worse.

Six months ago was a complete s*%t show. It’s currently a s*%t intermission.

A s*%termission.”

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“Wouldn’t everybody thinking it’s the worst time to buy actually make it the best time to buy?”

—Sir_Armadillo

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“I mean, maybe. But if the adage is ‘the best time to buy is when you can buy’, then no, at least not for me. We tried to buy last year. We tried very hard. We just didn’t have $100k in cash we could offer over asking. … But I can currently buy a single-family home in my area where a year ago that was not true. Now is the first time I’ve been in a position where I have enough of a down payment, enough of a salary, and enough options to actually buy a home.”

—Catsdrinkingbeer

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“If you’re looking for a ‘forever home’ or one that is almost certainly going to be long term, then I would buy. If there’s a decent possibility that you may have to move in the near future, then I wouldn’t risk it in the short term.

Way easier to break a lease than to sell a house when tens of thousands of dollars underwater.”

—kdilly16

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“I know people who bought at the worst time in the mid-’80s and did fine. I never even heard the term underwater until the 2008 crash. Don’t panic and do your homework.”

—The_Pip

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“I guess the person who told you that isn’t renting and paying all-time-high rent prices. I’d rather buy and have a fixed mortgage payment than keep paying more in rent year over year.

Rent never goes down, but at least a mortgage stays the same. A house may dip in value short term, but long term it will retain or gain in value.”

—TurbulentJudge1000

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“Wow, I don’t like seeing this because I’m closing on a house today.”

—bestsloper

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What experts think about buying a house right now

We’ve heard what the people have to say, now let’s bring a little data into the mix.

“It’s true that home prices are high in 2022, so that perspective suggests that now might not be a great time to buy,” says Realtor.com Chief Economist Danielle Hale. “On top of that, the cost to borrow money right now—the interest rate you’ll pay on a mortgage—is also not far off of its highest level in more than 13 years. This means that borrowing to buy a home is more expensive than it has been.”

But Hale says these shouldn’t be buyers’ only considerations.

With rents at an all-time high and still rising, buying a home and being your own landlord has advantages.

“You may think of owning a house as not having to pay rent, but economists view this as paying rent to yourself,” says Hale. “Taking on a mortgage with a fixed rate of interest (at least for a period of time) means that the homeowner has locked in the lion’s share of their housing costs—a nice hedge against inflation that is still running at just under 9%.”

She says that even if you don’t see any future home price appreciation, it can make more sense to buy than rent, especially in markets where the monthly cost of owning a home is lower than the monthly cost of rent.

“There aren’t as many of those markets, but there are still some, predominantly in the South and Midwest, as we found in our recent rental report,” Hale says.

Is it a good or bad time to buy a house?

With that information in mind, let’s go back to our initial question: Is now the worst time in history to buy a house?

“The data points to the ‘worst’ being behind us,” says Hale. “The number of homes for sale is up more than 26% compared to one year ago, which means that today’s shoppers have more homes to choose from than last year’s shoppers. Perhaps more importantly, the share of sellers making a price cut has risen, suggesting that today’s shoppers may have more negotiating room than before.”

Hale does acknowledge that homes are still more expensive than last year, but the price growth rate is slowing and is likely to slow further.

Another positive indicator for buyers? Homes are lingering on the market longer.

“Time on market is beginning to increase, signaling that the days of having to make an offer as soon as possible—perhaps even before seeing the home—are behind us,” Hale says.

Ultimately, buying a home is a wholly personal decision and the right timing varies from buyer to buyer.

“While market conditions couldn’t be called the best for buyers, they are somewhat improved,” says Hale. “Each of these indicators points to better balance than the housing market has seen over the last year, an advantage for today’s shoppers.”