Should you Buy a Home Now at 6.5% to 7% Interest, or Wait?

Let’s address the elephant in the room: mortgage interest rates.

If you’re asking, “Are rates going to drop soon, or should I buy now at 6.5–7%?” you’re not alone. This question is everywhere right now, and honestly—it’s a fair one. Rates have hovered in the mid-6% to low-7% range for most loan programs, and for a lot of buyers, that number feels high. But here’s what most people don’t realize: the conversation isn’t just about rates—it’s about affordability and timing.

Let’s break it down.

---

Where Are Interest Rates Headed?

As of April 2025, we’re in an interesting economic moment. Inflation has cooled but is still sticky in certain sectors (like energy and services), keeping the Federal Reserve cautious. The Fed hasn’t officially dropped rates yet, but it’s widely expected that we could see the first cut in late spring or early summer.

Does that mean mortgage rates will follow? Eventually—yes, but not overnight.

Mortgage rates tend to move ahead of the Fed based on expectations, so we’re already seeing some softening at the edges. However, the shift from 6.875% to something like 5.5% could still take time. We’re talking months—not weeks.

---

What Happens When Rates Drop?

Here’s the catch most buyers don’t think about:

When rates drop, affordability improves—but demand explodes.

Let’s say you’re looking at a $700,000 home today at 6.5% interest. Your monthly payment (principal & interest only) might be around $4,430.

If rates drop to 5.5%, that same loan might only cost you around $3,830 a month—a $600 savings per month.

Sounds great, right?

Yes… until you realize everyone else wants to buy that house too.

That demand is going to drive prices up. That $700,000 house you’re eyeing today? It could easily be $750,000 to $770,000 once rates hit 5.5% again.

So you’re saving $600/month, but you’re paying $50,000 to $70,000 more for the home—and in many cases, you’re back in a multiple-offer environment with waived contingencies, bidding wars, and pressure to overpay.

---

The “Marry the House, Date the Rate” Strategy Still Applies

This isn’t just a catchphrase—it’s solid strategy.

When you buy a home now at 6.5% or 7%, you’re locking in your home price in today’s market. You’re buying before the wave of buyers shows up and drives up pricing. If/when rates come down—whether it’s later this year or early next—you can refinance.

A good lender (like me) will help you track the market and jump on a refi opportunity the moment it makes sense.

---

Why Timing Beats Waiting

The #1 mistake I see buyers make is trying to time the bottom of the interest rate market and the housing market at the same time. That rarely works. Here’s why:

• If you wait for lower rates, you’re stepping into a market with higher prices and more competition.

• If you buy now, you get the home you want at today’s price, and you can refinance later into a lower monthly payment.

The market always corrects. Rates will go lower eventually—but so will inventory, and buyer competition will spike.

Right now, we’re in a window of opportunity. Fewer buyers, more leverage, more negotiability. It might not feel like it, but today’s rate market is more forgiving than the buyer frenzy that a lower rate environment will ignite.

---

The Real Question: Can You Comfortably Afford the Payment Today?

Forget headlines for a second. Ask yourself this: Can I comfortably afford the payment today?

If the answer is yes, then you’re in a great position to move forward. Because the long-term benefits of homeownership—equity growth, tax advantages, wealth creation—don’t start when rates hit 5%. They start the moment you own the home.

And remember, if rates drop, you’re not stuck. That’s what refinancing is for.

---

Bottom Line

Waiting for the perfect rate can cost you the perfect house.

Yes, rates will come down. But so will your chances of buying that dream home without a dozen other buyers chasing the same deal. If you’re financially ready, now is a smart time to act—before the crowd comes running.

If you’re still unsure or want to run your exact numbers, I’m happy to put together a custom game plan for you. No pressure, just facts.

Looking for a mortgage? Get no cost quote now!