"I'm waiting for rates to come down." I hear this constantly. It's a reasonable instinct. It's also often the wrong decision — not always, but more often than buyers realize.
The Rate-vs-Price Trade-Off
When rates are high, demand softens. When demand softens, prices stabilize or decline. The buyers sitting on the sideline waiting for lower rates are the same buyers who'll drive prices back up when rates fall.
The historical pattern in OC: when rates dropped meaningfully, demand surged within months and prices followed within a year. Buyers who waited for "the right rate" often bought at higher prices with only marginally lower rates.
The Numbers That Actually Matter
Two scenarios, same $1M home:
Scenario A — buy now at 7%
- 20% down ($200K)
- $800K loan at 7% for 30 years
- Monthly P+I: ~$5,323
Scenario B — wait 18 months, rates drop to 5.5%, prices up 6%
- Same home now costs $1.06M
- 20% down ($212K) — $12K more cash needed
- $848K loan at 5.5% for 30 years
- Monthly P+I: ~$4,814
You'd save ~$509/month — but you put in $12K more at close, and you rented for 18 months.
The "Marry the House, Date the Rate" Principle
You can refinance. You can't un-pay 18 months of rent. You can't retroactively get the lower purchase price from before rates dropped and demand resurged.
If the home is right — schools, location, size, condition — and you're staying 5+ years, the current rate is a starting point, not a sentence.
When It Does Make Sense to Wait
- You're not ready financially (emergency fund thin, down payment still saving)
- You're not sure of your location (job might move, lifestyle might shift)
- The specific market you're targeting is actually overpriced relative to comparable cities
I model three scenarios with every buyer in this situation: buy now, buy in 12 months with price increase, buy in 12 months with price decrease. That conversation is free — reach out.
