Waiting for interest rates to fall is a BAD IDEA

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Real Estate


Waiting for lower interest rates is a common strategy for many home buyers, as lower interest rates can result in lower monthly mortgage payments and potentially lower overall cost of homeownership. However, waiting for interest rates to go lower may also have its drawbacks:

  •  Increased home prices: The real estate market is constantly changing, and waiting for lower interest rates may result in missing out on potential home buying opportunities. If home prices in your desired area are rising, waiting for lower rates could result in you paying more for the same home later on.
  • Uncertainty: Interest rate trends are difficult to predict and can be influenced by many factors, such as economic conditions and government policies. There's no guarantee that interest rates will go lower, and waiting for them to do so may result in missed opportunities and prolong the home buying process.
  • Lost time: Time is a valuable commodity, and waiting for lower interest rates could result in delaying your plans to buy a home. By the time rates do eventually go lower, your financial situation or priorities may have changed.


But the most important thing that most First Time Home Buyers don't realize is how easy it is to refinance into a lower rate if you get locked into a higher rate. Once you lock your mortgage loan in and settle into your new home you will be amazed to see how many offers you will get to lower your rate. Now, while it is true that there is a cost to refinancing, there is also a breakeven point that a simple calculation can show you how much you gain by refinancing and the same calculation can also show you why waiting for a potential rate drop doesn't make sense if you are renting. 

You can always get into a lower rate, but if you wait and interest rates go up then you missed out on the lowest rate possible. 

Take a look at the graph above of the historical 30 year interest rates. We are in a pretty sweet spot where we are way below average rates, even at 6-7%. 


It's important to weigh the potential benefits and drawbacks of waiting for lower interest rates, and to consider your individual financial situation, goals, and timeline when making such a big decision. Consult with a financial advisor if necessary. But I am here to help anyone trying to get into owning property. Just remember the interest rate on renting is INFINITY!