I get asked this all the time, and my answer is usually: don’t make your home-buying decision based on trying to guess what interest rates are going to do.
Would a lower rate be nice? Of course. But there’s another side to it that buyers sometimes forget.
Falling rates = More competition for Homes
When rates come down, a lot of people who have been sitting on the sidelines start shopping again. More buyers can mean more competition, multiple offers, less negotiating power, and potentially higher home prices.
You might save money on your interest rate but end up paying more for the house.
No Crystal Ball
The other problem is that nobody knows exactly when rates will come down—or how much. We can watch the economy, inflation, the bond market and the Fed, but there is no magic date on the calendar when mortgage rates suddenly drop.
That’s why I tell my clients to look at the numbers today.
Ask Yourself These Questions
Do you like the house? Can you afford the payment? Does buying make sense for your family and your financial situation?
If the answer is yes, it may not make sense to put your plans on hold waiting for a rate that may or may not show up.
And remember: your mortgage rate isn’t necessarily forever. If rates improve enough down the road, we can look at refinancing. You can’t go back and renegotiate what you paid for the house.
There are also ways we can structure a loan today to help with the payment, including seller-paid closing costs, rate buydowns, and different loan programs.
Bottom line: Buy when the house, payment, and timing make sense for you—not because you’re trying to perfectly time interest rates. If rates come down later, we can see if a refinance would be beneficial for your specific scenario.
“Wendy was absolutely the best to work with throughout our home purchasing process! Wendy isn’t limited to working with a small number of lenders so we knew early on that she was going to get the very best deal for us! In addition to being very organized and a clear communicator with all the numbers and time sensitive information, she humanized the experience with grace and patience–she never made us feel like we were asking an obvious question or wasting her time! We joked that she provided both 5 star financial and psychotherapy services, and let’s face it–when dealing with a very quick turnaround move like ours, both services were needed to help get us to the finish line! We have already recommended Wendy and her team to our close friends and family and will be actively looking for any and every opportunity to recommend her to anyone anticipating a move. Thank you again Wendy, words can’t adequately express our appreciation for all that you did for us!!” – Brian B
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