Waiting to Buy Until Rates Drop

You might feel like waiting “one more year” to buy a home will make everything easier. Rates could drop, prices might cool off, and your savings could grow. But in today’s market, that wait often comes with a hidden price tag: higher purchase prices, more total interest over time, and another year of paying your landlord instead of building your own equity.​

Why waiting feels safer

You are not wrong to feel nervous. You see headlines about high rates, worry about overpaying, or secretly hope for a big crash so you can get a bargain. The challenge is that most current projections point to modest price growth in many areas, not big across‑the‑board drops, so waiting for the “perfect” market can keep you stuck while prices and rents inch up.​

How waiting can cost you

When you delay, you pay in a few ways:

• You miss a year of principal paydown and any price appreciation you could have captured as equity once you own a home.​

• If prices rise even a few percent, the same type of home you want can cost tens of thousands more in just a few years, which means a bigger loan and more interest paid over time.​

• Even if rates dip later, that lower rate on a more expensive home can erase much of the monthly savings you are hoping for.​

A quick “today vs. next year” picture

Imagine you are looking at a 500,000 home with a small down payment. If prices in your market grow around 5% in a year, that same home could be closer to 525,000 next year, so you bring a bigger down payment and borrow more. At the same time, you have spent another year paying rent, which is effectively 100% interest to your landlord because none of it turns into equity for you. In fact, you've just lost an additional $25,000 in equity by waiting one year!​

When it does make sense to wait

There are times when waiting is the smarter move for you. If your credit score needs work, a few months of focused effort could qualify you for a better rate or lower mortgage insurance. If your income is unstable or you have no emergency cushion, giving yourself time to strengthen your finances can protect you from stress once you do buy.​

Your next step

Instead of trying to time the market, focus on timing your life. You can sit down with a simple mortgage calculator, plug in today’s prices versus a conservative future price, and add in a full year of rent to see your personal “cost of waiting.” Once you see your own numbers, you can talk with a lender or advisor and decide whether buying now or later lines up better with your budget and your long‑term plans.​