Should I invest my cash in BND while I'm still searching for a house?

What is your time-frame? Are we talking a month or a year?

It could be a month to a year, depending when I could find a house I would like to buy.

How much cash? What state do you live in?

Unless you have a fairly high amount of cash and / or plan to put off buying the house for a year or more, it seems hardly worth the risk.

The investment has been paying a 2.53% annual yield (trailing twelve months) and you have your in-and-out transaction cost to consider as well as not-negligible risk.

^^^What he said.
However, if you are living in the right state, Vanguard might have an attractive long-term tax free muni state tax fund. In NYS, l use and love VNYTX.

$3000 minimum investment; you can easily write checks on it. And if you can leave $3000 in it, you have a nice place for future investments, should you ever have extra cash floating around after you have bought your house.

Be sure you figure out what your transaction costs would be, buying an ETF carries the weight of commissions in and out.