Should You Wait to Buy a Home If Mortgage Rates Might Drop?

September 09, 2025•3 min read

Mortgage rates have been on a rollercoaster over the past two years, leaving many buyers wondering: should you wait for lower rates before buying a home, or move forward now? While the thought of snagging a cheaper monthly payment is appealing, the decision is more complex than just predicting interest rates.

Where Mortgage Rates Stand Today

As of September 2025, the average 30-year fixed mortgage rate hovers around the mid-6% range. That’s down from the 7%+ levels seen in late 2023, but still significantly higher than the historic lows of 2020 and 2021. Economists project that rates may ease modestly in 2026 if inflation continues to cool and the Federal Reserve begins cutting its benchmark rate.

The key word here, however, is modestly. Even optimistic forecasts suggest that rates may decline by only half a percentage point to one full point over the next year or two. For buyers waiting on the sidelines, the savings may not be as dramatic as they expect.

Why Waiting Could Pay Off

Potential for Lower Monthly Payments

A drop of even 0.5% on a $400,000 loan can lower your monthly payment by around $120. Over the course of a 30-year mortgage, that’s more than $40,000 in savings—hard to ignore.

Better Affordability in a High-Cost Market

High mortgage rates have priced some buyers out of the market. If rates fall, affordability could improve slightly, giving buyers more room in their budget to choose the right home.

Flexibility Pays Off

If you’re renting comfortably or don’t need to move right away, waiting for rate improvements might help you secure a better long-term deal.

Why Acting Now Might Be Smarter

Home Prices Are Still Climbing

While rates have cooled demand somewhat, home prices nationwide continue to trend upward due to limited housing supply. Waiting for lower rates could mean facing higher purchase prices, which may offset any interest savings.

Refinancing Is an Option

Many buyers choose to purchase at today’s rates and refinance later if rates drop. This allows you to start building equity instead of waiting on the sidelines while prices rise.

Competition Could Heat Up Again

If rates fall, demand will likely surge. That means more bidding wars, faster sales, and less negotiating power for buyers. Getting into the market now could mean less competition and more favorable terms.

Questions to Ask Yourself

How long do I plan to stay in the home?
If it’s a long-term move, a slightly higher rate may not matter as much, especially if you refinance later.
Am I financially ready beyond the rate?
Down payment, closing costs, and emergency savings matter more than timing the market.
What’s my tolerance for risk?
If waiting makes you anxious or uncertain, acting now with a solid plan may bring more peace of mind.

Final Thoughts

Waiting for lower mortgage rates might sound like the smart move, but there’s no guarantee of significant savings—and the housing market rarely stands still. For many buyers, the potential cost of higher home prices and increased competition may outweigh the benefit of a slightly lower rate.

If you’re financially prepared and find a home that fits your needs, buying now can still be a strong decision. And remember: refinancing later can help you take advantage of future rate drops. Ultimately, the best time to buy a home is when your personal finances and lifestyle goals align—not just when rates look ideal.

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