The Real Cost of Waiting for Lower Mortgage Rates

By Josh Painter

Josh Painter is a real estate broker, mortgage broker, and the author of the book Best Version Ever.

If you’ve been holding off on buying a home because you’re waiting for interest rates to come down, you’re not alone. Four out of five buyers in a recent survey said they were waiting for rates to fall before entering the market. A quarter of them said they wouldn’t buy until rates dropped below 5%, which isn’t expected to happen anytime soon.

I understand the instinct. Nobody wants to lock in a rate that feels higher than it should be. But here’s what most people aren’t thinking about: while you’re waiting for the rate to get better, the cost of the home you want is still going up. And the conditions that favor you as a buyer right now might not be there when rates finally move.

So let me walk you through the real trade-offs so you can make this decision with numbers, not feelings.

1. The cost of waiting is real. Home prices are expected to rise another 2% to 4% this year, according to Fannie Mae and the National Association of Realtors. On a $400,000 home, that’s $8,000 to $16,000 more you’d pay just by waiting twelve months. And every month you wait, you’re paying rent instead of building equity.Prices have already gone up about 16% since 2022 even with rates being elevated the entire time. The idea that prices will drop when rates are high hasn’t played out.

On top of that, the buying conditions right now are actually working in your favor. Active listings have been growing for 28 consecutive months. Homes are sitting on the market longer, with themedian days on market now at 70 days. Sellers are more willing to negotiate, and you have more options than buyers have had in years. When rates do drop and all those sidelined buyers jump back in, that leverage disappears.

2. Your rate is not permanent. This is the part that changes the conversation for most people I sit down with. The rate you lock in today is not the rate you’re committed to for 30 years. If rates come down in a year or two, you refinance and your payment goes down. That’s a straightforward process, and most people who bought in the last couple of years are already planning to refinance when rates improve.

But here’s what you can’t undo. You can’t go back and buy at today’s price once it’s gone. The home that costs $400,000 today could cost $416,000 a year from now. And the home you wanted at $416,000 might be $432,000. Every year you wait, the entry point moves further away. The rate is temporary. The purchase price is permanent. That’s the part most people get backwards.

3. The real question isn’t about rates. The decision to buy shouldn’t come down to what rates are doing on any given week. It should come down to whether the monthly payment works for your life right now. And that’s something I can help you figure out in about 15 minutes.

I can show you what your payment would look like at today’s rates. What it would look like if rates drop a point and you refinance later. And what waiting another year would actually cost you when you factor in rising prices and the rent you’re paying in the meantime. Once you see those three numbers side by side, the decision gets a lot clearer. It stops being about the headlines and starts being about your actual situation.

The bottom line. Nobody can predict exactly where rates are going. But we do know that prices are still climbing, the buying conditions right now favor you more than they have in years, and your rate can always be refinanced later. The one thing you can’t change after the fact is what you paid for the home. If you’ve been going back and forth about whether now is the right time, stop guessing and get the real numbers. Call me at 951-265-3524 or email me at josh@morethanjustarealestateagent.com. You can also visit training.morethanjustarealestateagent.com to learn more. I’ll run the numbers for your specific situation and you’ll know exactly where you stand.