It's one of the most common questions we hear from prospective buyers: Should I buy now, or wait until mortgage rates come down?
With how unpredictable the economy has been, it's an understandable question. Mortgage rates have a significant impact on monthly payments and purchasing power, and even a small change can make a meaningful difference.
In 2020, mortgage rates averaged about 3.11% for a 30-year fixed loan, eventually dropping below 3% in 2021 as the pandemic drove borrowing costs to historic lows. By comparison, rates are hovering around 7.2% in November 2026, more than double the 2020 average and a significant factor in today's housing affordability challenges.
For buyers who became accustomed to those historically low rates, today's borrowing costs can feel almost impossible. But it's important to remember that pandemic-era rates were an anomaly, not the historical norm.
Is waiting really the better option?
Not necessarily. While lower interest rates could make monthly payments more manageable, there's no guarantee that home prices, competition, or available inventory will remain the same while you wait. If rates decrease, more buyers may return to the market, potentially driving up competition and purchase prices.
This is where we like to remind buyers: "Date the rate and marry the price." A home purchased at a favorable price with a higher interest rate may offer more long-term value than waiting a couple of years to purchase a more expensive home at a lower rate. You may have the opportunity to refinance if interest rates improve, but you can't go back and negotiate a lower purchase price after closing. Of course, refinancing isn't guaranteed, and the overall numbers still need to make sense from the beginning.
Today's market may also offer opportunities that weren't as readily available a few years ago. More inventory and longer marketing times can give buyers room to negotiate on purchase price, closing costs, repairs, or even seller-paid mortgage rate buydowns.
What should buyers consider instead?
Start with your personal financial picture. When we begin working with a new buyer, we help connect them with trusted financial and mortgage professionals who can help evaluate their options. Consider your down payment, comfortable monthly budget, job stability, anticipated length of ownership, and the additional costs of maintaining a home.
Rather than focusing solely on the interest rate, look at the entire monthly payment and the total cost of ownership. Property taxes, homeowners insurance, HOA dues, and maintenance expenses all contribute to what you'll actually spend each month.
So, when is the right time to buy?
The best time isn't necessarily when mortgage rates hit a particular number. It's when you're financially prepared, find a property that meets your needs, and feel comfortable with the long-term commitment. Ultimately, what matters most is finding a home and a monthly payment that work for your financial situation and lifestyle.
At ODonnell Group Realty, we help buyers look beyond the headlines, and evaluate the bigger picture, so they can make decisions with confidence, not pressure.