Why Waiting For Lower Interest Rates Could Cost You More

You have been watching the market and mortgage interest rates, scrolling through home listings, and waiting for the perfect moment to buy your new home when interest rates “finally” come down.

Sound familiar? If you can identify with this scenario, you are not alone.

A home purchase is one of the largest purchases you will make. Waiting for the perfect timing is only natural. However, the truth is that waiting for lower interest rates could cost you more in the long term.

Perfect Timing Is A Myth

Some buyers are waiting and hoping interest rates will drop significantly. This approach can backfire on you. Various unpredictable factors influence mortgage rates, including inflation, the broader economy, and global events. Even top economists can’t pinpoint when rates will change or by how much.

While you are waiting for that ideal number, home prices are still quietly creeping upward. The Pittsburgh real estate market has remained strong, with the median home price rising 4.8% area-wide over the past year. 

Let’s Do The Math

Here is a simple scenario:

Let’s look at a $250,000 home today with an interest rate of 6.75%. You decide to wait, hoping the rate will drop to 6.25% in a year.

In the meantime, homes in that area appreciate 6% over the next year. (Which may be conservative. Franklin Park, for example, has appreciated 14.7% in the past 12 months.) Now, that same house costs $265,000. Your monthly payment may still be higher, even with a slightly lower rate. You have also missed out on a year of building equity.

While you were holding out for a lower rate, the price of homes increased.

Buy The Home You Love Now

Here is the strategy savvy homebuyers are using now:

Buy the home you love now and refinance when rates go down.

Building equity begins when you buy a home. You also settle into your new space and take advantage of the current market opportunities. If rates drop later, refinancing can lower your monthly payment. By then, you have already locked in the home’s value before it appreciates further.

In today’s local Pittsburgh real estate market, we see more inventory and fewer bidding wars than in recent years. Although we are still in a seller’s market, we are heading toward a more neutral market as buyers begin to gain leverage.

How To Be A Savvy Buyer Now

If you are ready to move forward but still hesitant about timing, here is what I recommend:

• Get pre-approved to understand your buying power and lock in your rates.
• Know your monthly payment comfort zone. Sometimes, the number that matters most is your payment, not the interest rate.
• Explore creative financing options with the guidance of an ethical lender.
• Work with a local real estate expert (hey, that’s me!) to help you find the right home with the best value and growth potential.

Start Now To Enjoy Benefits Of Homeownership

There is no “perfect” time to buy a home. There is a smart time, and that’s when you are ready, informed, and supported by someone who has your back. 

Pittsburgh’s real estate market continues to show strength and resilience. There are real opportunities for buyers who are ready to take action now. 

I would love to discuss your goals, budget, and timeline. With 22 years of experience in the Pittsburgh real estate market, I can support you through the process so you can make your move with clarity and confidence.

To answer your real estate questions, contact me here, by phone at 412-848-3907, or by email at Kim.Esposito1@pittsburghmoves.com.