How To Buy a Home Without Waiting for Lower Rates
If you’ve been holding off on buying a home because you’re waiting for mortgage rates to drop, you’re not alone. Many buyers are hesitant, hoping for a more favorable interest rate before making their move. But here’s the reality: waiting may cost you more than you think.
The good news? There are strategies to buy a home now—without letting higher rates hold you back. Let’s explore why waiting could be a mistake and how you can successfully purchase your dream home in today’s market.
Will Mortgage Rates Drop Soon?
Many people are hoping mortgage rates will come down before they buy a home. But will that actually happen? According to the latest forecasts, experts say rates will decline, but not by as much as a lot of people want.
A few months ago, experts were forecasting mortgage rates could dip below 6% by the end of the year. But recent projections suggest that may not happen after all.
While mortgage rates are still expected to decline some later this year, projections from Fannie Mae, the Mortgage Bankers Association (MBA), and Wells Fargo now show them stabilizing closer to 6.5% by the end of the year:
| Quarter | Fannie Mae | MBA | Wells Fargo | Average of All Three |
|---|---|---|---|---|
| 2025 Q1 | 6.90% | 6.90% | 7.10% | 6.96% |
| 2025 Q2 | 6.80% | 6.90% | 6.90% | 6.86% |
| 2025 Q3 | 6.70% | 6.70% | 6.65% | 6.68% |
| 2025 Q4 | 6.60% | 6.50% | 6.50% | 6.53% |
That means if you’re holding off on buying a home in hopes of much lower mortgage rates, you may be waiting a while. And if you need to move because something in your life has changed—like a new job, a growing family, or a relocation—waiting may not be a viable option.
Why Waiting for Lower Rates Could Backfire
While it’s true that mortgage rates have risen compared to the historic lows of 2020-2021, the housing market is constantly shifting. Here’s why waiting for lower rates might not be your best move:
1. Home Prices Are Likely to Keep Rising
Demand remains strong, and inventory is still tight in many areas, especially in desirable neighborhoods like Flower Mound, Argyle, and Southlake. If you wait, you might end up paying more for the same home—even if rates drop slightly.
2. More Buyers Will Flood the Market When Rates Drop
As soon as mortgage rates decline, competition will skyrocket. More buyers mean more bidding wars, driving up home prices and making it harder to secure your ideal property. Many buyers will find themselves in multiple-offer situations, pushing prices even higher.
3. You Can Refinance Later
The phrase “marry the house, date the rate” is more relevant than ever. You can lock in a home at today’s prices and refinance when rates drop—potentially lowering your payment while keeping the equity you’ve built. Plus, refinancing later allows you to adjust your loan term and payment structure to better fit your long-term financial goals.
4. Inflation and Economic Factors Impact Rates
The Federal Reserve’s monetary policies influence mortgage rates, but so do global economic conditions, inflation, and demand for mortgage-backed securities. Predicting interest rate movement is nearly impossible, and waiting could backfire if rates increase instead of decrease.
Creative Financing Options to Buy a Home Now
Since rates aren’t expected to decline as much as originally expected, it may be worth considering alternative financing options that could help you get into a home sooner rather than later. Here are three strategies to discuss with your lender to see if any of these make sense for you:
1. Mortgage Buydowns
A mortgage buydown allows you to pay an upfront fee to lower your mortgage rate for a set period of time. This can be especially helpful if you want or need a lower monthly payment early on. In fact, 27% of agents say first-time homebuyers are increasingly requesting buydowns from sellers in order to buy a home right now.
There are two types of rate buydowns:
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Temporary Buydowns (e.g., 2-1 buydown): Lower interest rates for the first few years before adjusting to the standard rate.
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Permanent Buydowns: A lump-sum payment to reduce the rate for the life of the loan.
2. Adjustable-Rate Mortgages (ARMs)
Adjustable-rate mortgages (ARMs) typically start with a lower mortgage rate than a traditional 30-year fixed mortgage. This makes them an attractive option, especially if you expect rates to drop in the coming years or plan to refinance later.
And if you remember the housing crash, today’s ARMs aren’t like the risky ones back then. Lance Lambert, Co-Founder of ResiClub, explains:
". . . ARM products today are different from many of the products issued in the mid-2000s. Before 2008, lenders often approved ARMs based on borrowers' ability to pay the initial lower interest rates. And sometimes they didn’t even check that (remember Ninja loans). Today, adjustable-rate borrowers qualify based on their ability to cover a higher monthly payment, not just the initial lower payment."
3. Assumable Mortgages
An assumable mortgage allows you to take over the seller’s existing loan—including its lower mortgage rate. And with more than 11 million homes qualifying for this option, according to U.S. News, it’s worth exploring if you want or need a better rate.
Take Action Now
Waiting for a big decline in mortgage rates may not be the best strategy. Instead, options like buydowns, ARMs, or assumable mortgages could make homeownership more affordable right now.
Instead of waiting, take control of your home-buying journey today by using smart financing strategies and working with a trusted real estate expert. There are always opportunities in real estate—if you know where to look.
Ready to buy your home without waiting for lower rates?
Let’s talk! Contact BlueFuse Realty Group today to explore your options and start your home search with confidence.
