Should I Wait for Interest Rates to Drop Before Buying a House?

If you’re a first-time home buyer, you’ve probably heard this advice more than once:

“Just wait for rates to drop—it’ll save you money.”

Sounds good in theory. But here’s the problem: everyone else is waiting too. And when rates drop, the competition will heat up fast.

So what should you do? Let’s walk through the real factors to consider before putting your home search on hold.

1. You Can Refinance—You Can’t Rewind Price Jumps

Yes, lower rates mean a lower monthly payment.

But when rates drop, more buyers jump back in… and so do home prices.

You can refinance your mortgage later when rates improve, but you can’t go back in time and buy a house for $25,000 less if prices shoot up again.

Buyers who wait for a “perfect” rate often miss out on the better deal overall.

2. Monthly Payment Isn’t Just About Rate

A lot of people focus only on the interest rate, but here’s what also affects your monthly cost:

• Home price

• Down payment

• Taxes & insurance

• HOA fees

• Loan program

I’ve had clients get a 6.5% rate but end up with a better monthly payment than someone at 5.75%—because they negotiated better or had lower taxes.

3. Supply Is Still Low

Even with rates higher than in recent years, there’s still not enough inventory—especially for starter homes.

When rates do come down, you’ll be competing with more buyers… and likely offering more money, faster, and possibly with fewer contingencies.

In short: you’ll be fighting harder for the same house.

4. Buying Now = Building Equity Sooner

Every month you own, you’re building equity. Every month you rent, you’re not.

Even if you buy at a slightly higher rate now, you’re starting the process of building wealth—and that can put you in a much stronger position down the road.

So… Should You Wait?

If you’re not financially ready yet, waiting makes sense.

But if you’re stable, motivated, and just unsure because of interest rates—don’t wait for the perfect storm.

Let the market work for you instead of against you.

I’ve helped dozens of first-time buyers find smart deals in today’s market—not the one they wish existed.

Want help mapping it out?

Text me the word MOVE and I’ll send you my First-Time Buyer Checklist to help you prep for your next step. Paul Linn - 317-629-0070 📲