Should You Wait for Mortgage Rates to Drop? Here’s What You Need to Know
If you’ve been holding off on buying a home, waiting for mortgage rates to drop—you’re not alone. But will rates actually fall enough to make a big difference? Probably not as much as many are hoping.
The good news? Even if rates don’t take a major dive, there are still smart ways to make buying a home more affordable.
Will Mortgage Rates Drop?
A few months ago, experts predicted mortgage rates could dip below 6% by the end of the year. But now, updated projections from Fannie Mae, the Mortgage Bankers Association (MBA), and Wells Fargo suggest rates will likely settle in the 6.5% to 7% range instead.
That means if you’re waiting for a dramatic rate drop before making your move, you might be waiting a while. And let’s be real—life doesn’t always wait. Whether you’re relocating for a job, growing your family, or just ready for a change, delaying your homeownership plans might not be the best move.
Making Homeownership Work in Today’s Market
Since rates aren’t expected to drop significantly anytime soon, now’s the time to explore creative financing options that can help you get into a home sooner rather than later. Here are three strategies to discuss with your lender:
1. Mortgage Buydowns – Lower Your Rate Now
A mortgage buydown lets you pay an upfront fee to temporarily lower your interest rate, reducing your monthly payment for the first few years. This is a popular strategy right now—27% of real estate agents report buyers are negotiating buydowns from sellers to make homeownership more affordable.
2. Adjustable-Rate Mortgages (ARMs) – Flexibility for the Future
An adjustable-rate mortgage (ARM) typically starts with a lower rate than a traditional 30-year fixed loan, which means a lower initial payment. If you believe rates will drop in the next few years (or you plan to refinance later), an ARM could be a smart move.
And if you’re thinking, Wait, aren’t ARMs risky?—they’re not what they used to be. Unlike the mid-2000s, today’s ARMs require borrowers to prove they can afford payments even at a higher rate, reducing past risks.
3. Assumable Mortgages – Lock in a Lower Rate
With an assumable mortgage, you take over the seller’s existing loan—including their lower interest rate. And here’s the kicker: Over 11 million homes qualify for this option. If you find a home with an assumable loan, this could be a game-changer for keeping your mortgage payments lower.
The Bottom Line
If you’re waiting for mortgage rates to plummet before buying, you might be waiting longer than expected. Instead of putting your homeownership plans on hold, consider smart alternatives like buydowns, ARMs, or assumable mortgages to make buying a home more affordable now.
Have questions? Let’s talk. We can connect you with trusted local lenders to explore the best strategy for your situation.
What’s your game plan for home buying this year? Let’s make it happen.
