The Cost of Waiting for Lower Rates

Many buyers are delaying their home purchase, hoping mortgage rates will come down. That sounds logical, but waiting could cost you more than you expect.

When you put your plans on hold, you’re not just waiting on rates. You could also be missing out on home price appreciation. And if rates do fall, buyer demand typically increases, which can push prices higher.

We’ve seen this dynamic before. After the COVID pandemic, historically low mortgage rates fueled a surge in buyer demand and home prices climbed rapidly as a result.

Looking at more recent data, national home values rose 1.3% in 2025 according to the latest Case-Shiller Home Price Index. At first glance, that may seem like appreciation is slowing compared to recent years. But that annual figure was weighed down by softer readings from March through July, a period when mortgage rates ranged between 6.75% and 7.125%, cooling buyer activity.

Then in late August, Fed Chair Jerome Powell signaled at the Jackson Hole Economic Symposium that rates were likely to decline. Mortgage rates began trending lower soon after that, and home prices responded with strong monthly gains last fall.

When we annualize appreciation from September through December, the pace rises to 4.6%. Looking at October through December, when rates were even more favorable, annual appreciation accelerates to 5.3%.

That’s a meaningful shift.

In fact, 19 of the top 20 major cities posted monthly price gains in December. And this happened during the winter, which is typically a slower season for housing. As we head into the spring market, demand often picks up even more.

The key takeaway? When rates decline, competition tends to increase – and more competition often means higher prices.

Over the long term, home values have consistently trended upward. Owning a home allows you to benefit from that growth rather than risk paying more later. With each payment, you build equity and strengthen your financial foundation.

Bottom line: Trying to time the market based on rates alone can be costly. The sooner you enter the market, the sooner you start building wealth through homeownership.

Want market insights like this delivered every day?

With an MBS Highway membership, you’ll get expert analysis and innovative tools designed to help you compete – and win – in today’s market.

Access resources like the Bid Over Asking Price calculator, Buy vs. Rent and Loan Comparison tools, plus daily market videos and real-time lock alerts. Everything you need to guide clients with clarity and close more deals.

Start your 14-day free trial of MBS Highway and see how it can help you stay ahead and grow your business.

By The MBS Highway Team