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Should You Buy a House Now or Wait for Lower Rates?
Should you buy a house now or wait for lower mortgage rates? It’s the question many homebuyers are asking, and the answer could mean a $145,000 difference in your equity. If you’re wondering whether you should buy a house now or wait, you’re not alone. Many buyers across the country are grappling with this decision as they consider whether to wait for rates to drop before jumping in.
But here’s the thing: while rates might come down, home prices continue to appreciate. And the longer you wait, the more you might pay. Not just in purchase price, but in missed equity.
Let’s look at the real numbers.
Should You Buy a House Now or Wait? The Financial Analysis
We analyzed two realistic scenarios using a $1.93 million home as a case study, with current market conditions and reasonable projections. Whether you’re looking at the best neighborhoods for first-time homebuyers or considering a move to one of the best towns in San Mateo County, the results might surprise you.
Real Market Data: What the Numbers Show
Using actual market data from San Mateo as our case study:
- Median home price is $1.9M as of July 2025
- Homes are selling for 103% of list price on average
- The median time on market is only 13 days, showing persistent buyer demand
- Price per square foot is $1,249, up 1.8% year-over-year
In other words, even with 6.5% interest rates, markets remain competitive and prices are holding firm nationwide.
What You Can’t Refinance: Time & Opportunity
Yes, interest rates matter. But so does time.
Every month you wait, the market moves on. That home you’re considering today may cost significantly more two years from now. And while you might score a lower rate later, you’ll also:
- Miss out on years of appreciation
- Miss out on years of loan paydown
- Risk entering a more competitive market when rates drop and buyer demand spikes
- Face higher down payment requirements on the increased purchase price
Key Factors to Consider Before You Decide
Why Markets Often Remain Strong
Fundamental factors continue to support home values in many markets, especially in desirable areas like the best family-friendly neighborhoods in San Mateo County:
- Limited housing inventory
- Strong employment growth
- Population growth in desirable areas
- Continued demand from millennials entering peak buying years
Interest Rate Reality Check
While everyone hopes for lower rates, consider:
- Rate predictions are notoriously difficult
- When rates do drop, competition increases dramatically
- Current rates, while higher than recent years, are still reasonable historically
- Your personal financial situation matters more than market timing
Frequently Asked Questions
Q: Should you buy a house now or wait for interest rates to drop?
Based on our analysis, buying now and refinancing later typically results in more equity ($145,642 more in our example) than waiting for lower rates. While you’ll have higher initial payments, you benefit from home appreciation and loan paydown that waiting eliminates.
Q: What if mortgage rates don’t drop as expected?
Rate predictions are notoriously difficult. Even if rates stay elevated, you’ll still benefit from home appreciation and building equity through payments. You can also explore real estate investment strategies to maximize your returns.
Q: Is this analysis applicable to all price ranges?
The principle applies across price ranges, though the dollar amounts vary. The key factors remain: appreciation, equity building, and opportunity cost of waiting. Consider exploring different neighborhoods for first-time buyers if budget is a concern.
Q: What about the risk of buying at the peak?
Real estate is typically a long-term investment. Even if you buy at a local peak, historical data shows that well-located properties in strong markets like San Mateo County tend to appreciate over time. The bigger risk is often waiting and missing out on equity building.
Ready to Make Your Decision?
Every buyer’s situation is different. I don’t believe in pressure, I believe in planning.
If you’re curious about what buying now might look like for your specific goals, I’ll run the numbers for you. Whether you’re considering your first home, a move-up purchase, or just watching the market, I’m here to help you make a confident, informed decision.
Let’s Talk Strategy
Get a personalized “buy now vs wait” analysis for your specific situation and budget. I’ll help you understand the real costs and benefits of both options.
Schedule your personalized market analysis
Let’s make your next move your smartest one yet.
Disclaimer: These projections are for illustrative purposes and based on historical market trends and current market data. Actual results may vary. Home appreciation rates, interest rate changes, and market conditions are subject to economic factors beyond prediction. Please consult with a qualified financial advisor and obtain current loan estimates before making any real estate decisions.
About the Author: Vincent Martell Smith is a licensed real estate professional with Coldwell Banker Realty, DRE# 02227615, specializing in San Mateo County and Peninsula real estate.
