Should You Wait to Buy a Home If Mortgage Rates Might Drop?

September 02, 2025•3 min read

What’s Behind the Mortgage Rate Uncertainty?

As of early September 2025, mortgage rates are hovering around 6.7% for a 30-year fixed loan. While that’s down from the peaks seen in late 2023, it’s still significantly higher than the ultra-low rates homebuyers enjoyed just a few years ago.

Many buyers are now facing a tough decision: Should they buy a home now, or wait in hopes that mortgage rates will drop further?

That question doesn’t have a one-size-fits-all answer—but understanding the current rate environment, inventory challenges, and the true cost of waiting can help you make a more confident decision.

What the Experts Predict for Mortgage Rates

Forecasts from housing analysts suggest that rates may drift lower over the next 6 to 12 months—but probably not by much. Fannie Mae, for example, projects rates could reach around 6.5% by the end of 2025 and potentially fall closer to 6.1% in 2026.

However, those forecasts depend on inflation cooling, the labor market remaining stable, and the Federal Reserve beginning to ease interest rates. None of these are guaranteed.

The reality is: rates may fall gradually, but sharp drops are unlikely in the short term. And since mortgage rates can shift daily based on economic data, trying to “time the market” perfectly is extremely difficult.

What Waiting Might Cost You

Waiting for lower rates can make sense in theory—but only if home prices and your personal finances stay put. In today’s market, that’s not always the case.

Here’s what you could risk by waiting:

Rising Home Prices: Inventory remains tight nationwide, with many homeowners unwilling to sell due to having locked in much lower mortgage rates. This “lock-in effect” is limiting supply and keeping prices elevated. In many markets, prices are still rising despite higher rates.
Increased Competition: If rates fall even modestly, more buyers may re-enter the market, increasing competition for limited inventory and potentially driving prices up further.
Missed Equity Growth: Buying sooner means starting to build equity now—not later. Even if your rate isn’t ideal, the equity gained from home appreciation could outweigh the interest savings from waiting.

When Waiting Could Be the Right Move

For some buyers, especially those with flexible timelines, waiting could pay off. Consider holding off if:

You’re not financially ready: Buying a home with a tight budget can be risky in a high-rate environment. Waiting could give you time to save more for a down payment or improve your credit score, which can lower your future rate.
You’re not set on a location: If your job or personal life is in flux, it might be smarter to rent a little longer and wait until you’re more certain about where you want to live.
You’re exploring alternative loan options: Adjustable-rate mortgages (ARMs) and buydowns are becoming more popular as short-term solutions. You might benefit from understanding all your loan options before locking into a fixed rate.

A Balanced Strategy: Buy When It’s Right for You

The best time to buy isn’t always when rates are low—it’s when your personal finances, life situation, and long-term plans align.

If you find a home that fits your needs and budget today, and you plan to stay for at least a few years, buying now could make sense—even if rates drop later. You can always refinance if rates fall significantly, but you can’t go back and reclaim years of missed equity or appreciation.

On the other hand, if your finances or lifestyle are in transition, waiting could give you more flexibility and peace of mind.

Final Thoughts

Mortgage rates may decline gradually in the coming year—but housing inventory remains tight, and home prices aren't expected to fall significantly. While waiting could offer savings on interest, it might also cost you in higher prices and missed opportunities.

Ultimately, the decision comes down to your financial readiness, local market trends, and long-term goals. If you’re unsure, talk to a trusted mortgage advisor who can help you crunch the numbers and consider both short- and long-term impacts.

Sources