Should You Buy a Home Now or Wait for Interest Rates to Come Down?

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Today's question — and a housekeeping note

Welcome to Mortgage Mom Radio. I'm Debbie Marcoux, the Mortgage Mom — it's Wednesday, it's 1 p.m., and we are live on YouTube and Facebook. I can see questions from both platforms, so put yours in the feed.

Quick announcement: I've retired the old text-message keyword MOM and replaced it with LIVE. Here's why. People get excited about buying or refinancing, opt in, get the deal done — and then understandably lose interest for a few years, and we ended up sending 4,000 texts to 3,800 people who had no intention of joining. So we're starting the list fresh: text LIVE to 844-935-3634 and you'll get one text a week with the topic and the link to join.

Today's show is interactive on purpose: should you buy now, refinance now, or wait for interest rates to come down? There's good reasoning on both sides, and I want your opinions in the feed — then I'll tell you where I stand.

Where rates are right now

Let's set the table. Rates are definitely higher than they've been in many years. On a government loan — FHA or VA — you're looking at rates in the high sixes, somewhere between 6.5% and 7% depending on whether you pay points or get seller credits to buy the rate down; I'm seeing about 6.75% on average. On a conventional loan — Fannie Mae or Freddie Mac — you're in the ballpark of 7.5%, a little lower or higher depending on your credit score, the property type, and your down payment. That's our starting point for this conversation.

The opinions are rolling in: Heather says don't wait — buy now and refinance later. Armando agrees. And Janice says it depends on whether the house is your forever home, because refinancing is expensive. I love all of these, and we're going to work through each one.

If you're selling to buy: you're a wash

Start with the homeowner who put their plans on hold: "my rate is low, my payment is low, if I sell and buy at these rates my payment jumps — I'll wait." Think back to when you first had that thought. If it was when rates started climbing in 2021, look at what your home was worth then versus now. For somebody selling one home and buying another, you're basically a wash: your home went up in value, and so did the one you want to buy. There's no rush either direction — and that's exactly why inventory is as low as it is. Nobody sells right now without a life reason: a relocation, a baby on the way, inheriting a parent to care for, a divorce. Those things can't wait for a market; everything else can.

And because inventory is that low, even with rates high we are still seeing appreciation — month over month and year over year across the majority of the country, with only certain pockets seeing any depreciation. Waiting has not produced cheaper houses. So if you're a seller-buyer: do it when the time is right for your life. Buy today and you pay a higher rate but a lower price than later; buy later and your sale price is higher too. A wash.

If you're buying without selling: the math is different

Now take the younger buyer in a condo — just married, baby on the way, wants to keep the condo as a rental and buy something bigger. Or the first-time buyer with nothing to sell. If you started thinking about this in 2021 and put it on hold, go look at what you could have bought that property for two or three years ago. Today it's a lot higher. And when rates come down and the market takes off, it will be higher still — because of everybody who's been sitting and waiting.

For you, my opinion is Heather's and Armando's: do it now, and refinance when rates come down to push the payment lower. If it becomes a rental, you're renting into a strong rent market too. That's my honest read for the first-time buyer and the portfolio builder.

“I'll just wait until next year”

A comment from the feed: “I want to buy a home but I think I'll just wait — next year. It's not easy with rates and prices.”

That is what a lot of people believe, and it's what the majority of would-be first-time buyers are doing: prices are high, rates are high, wait for 2025. But consider this. Everybody who's waiting is planning the same move you are. And of the analysts and market-readers I follow, I have not read one reputable forecast calling for home values to plummet — most believe values keep rising. So picture 2025: rates come down, and every one of those on-hold buyers floods back at once. Were you trying to buy in 2020 and 2021? There wasn't enough inventory, there were more buyers than sellers, and getting an offer accepted practically required a huge down payment or all cash, waiving your appraisal contingency — agreeing to bring cash for any gap between the appraisal and your price — even skipping the physical inspection. That is what the majority of analysts expect again when rates drop: multiple offers, overbidding, and very fast appreciation, like we saw in 2020 and 2021.

So I'm going to disagree with you, respectfully — you're not wrong about how hard today feels, but here's the other side of the coin. The question isn't "should I wait?" It's "can I buy now?" Do you have the credit? Is there a down payment assistance program that fits? What can you afford at today's rates and prices? Maybe it's not the three-bedroom, two-bath single family — but can we get you into a property? Even a condo goes up in value, and that equity becomes the ticket to the single family later, whether you sell it or rent it out.

He also asked whether we help people in Washington state — we absolutely do. I'm licensed in 11 states, mostly the West Coast plus several across the Midwest, South, and East: Washington, Nevada, Arizona, California, Texas, Illinois, Tennessee, North Carolina, and more. And it never hurts to call. A consultation is a conversation, not a loan application — nobody's pulling your credit just to talk through what you could buy, what payments would look like, and whether now works for you. I truly believe the people who are ready, willing, and able to move in 2024 — before the summer months hit — are going to be sitting in a very good position come 2025.

What a refinance really costs

Janice's point deserves its own segment: is refinancing expensive? Here's the honest answer. The hard costs — the one-time fees — depend on your state (escrow state versus attorney state), what title and appraisal run in your area, and the size of the loan and value of the home. A big estate costs more to appraise than an average single family; an investment property or a three-to-four-unit building with rental income costs a bit more too. On average you're looking at about $3,500 to $5,000 in hard costs.

So Janice is right that it's not super cheap — and Heather's right that it's not super expensive, because the cost is weighed against the monthly savings and the savings over the life of the loan. And as Michael from the feed confirmed from his own refi: the fees can be financed into the loan, so you don't have to pay them cash out of pocket.

The real test isn't whether it's your forever home. It's the break-even. Say the refinance costs $5,000 and saves you $250 a month — round numbers, I'm in the studio without a calculator — that's about three years to break even. Selling in under three years? Keep the loan you have; the refi would cost you money. Staying four or five years or longer? You're saving money past the break-even, whether the home eventually becomes a rental or gets sold. Match the refinance to your time frame in the property, and it doesn't matter what label the house carries.

Down payment assistance

From the feed: “What are the homeowner assistance programs?” There are down payment assistance programs statewide, citywide, and some that work across the nation, generally for first-time buyers in lower income brackets, helping with the money needed for the down payment. Which programs fit depends on where you're buying, plus your credit score and income — so it starts as a consultation question, and if it sounds right, we move to the pre-approval application to confirm you qualify and see every option on the table.

Refinancing today when your rate is 3.5%: the blended-rate math

Now the refinance side of today's question. If your current rate is significantly lower than today's, there's no reason to refinance — full stop. So who's even considering it? Someone who needs cash: to pay off debt, to do improvements, to build an ADU, to put a down payment on another property.

Whether that refinance makes sense comes down to your balance versus your cash need. Two scenarios. You owe $150,000 on a home worth $700,000–$800,000 and you want $150,000–$250,000 out: a second mortgage at a rate approaching 10% on a balance that size makes no sense — your blended rate across the 3.5% first and the 10% second would be higher than one new first mortgage at 7–7.5%. Roll it together. Opposite case: you owe $500,000 at 3.5% and need $100,000: $100,000 at 10% stacked on $500,000 at 3.5% beats $650,000 at 7.5% by a mile. Keep the first, take the second.

What we look for is your cheapest option, period. It's not "we need loans this month, let's talk this guy into a refinance" — it's doing right by the client so they're a client forever. Rates will drop again, and whoever refinances for cash today can refinance again later to bring the payment down, same as a buyer.

One more thing on the debt side: if the reason is credit card debt — and we see clients with $100,000 across cards and personal loans — pull up your actual card terms before you assume anything. Cards people believed were at 13% or 16% are coming in at the high 20s and even the 30s. At those rates, the consolidation math moves fast, and sometimes even the full new first mortgage wins. We'll run the numbers and show you your cheapest path.

Wrap-up

If you've been thinking about buying at all — this year or next — jump on my free home buyer workshop this coming Wednesday, March 6th at 5 p.m. Pacific, right here on YouTube: the whole process start to finish, the lingo, the pre-approval, which loan fits you. Text RSVP to 844-935-3634 for the link. And to know when the weekly show goes live, text the word LIVE to that same number — 844-WE-LEND-4 — which is also the office line if you want to talk with me or the team. Have a fabulous rest of your week, and I'll be back next Wednesday at 1 p.m. Pacific on YouTube and Facebook.