Brenna O'Donnell
One of the most common questions I hear from buyers is, “We’re waiting for rates to come down.” It sounds like the right idea, but what most people don’t realize is that waiting for the “perfect” time often comes with trade-offs that can cost more in the long run. When interest rates go down, home prices usually go up. Rates and prices tend to move in opposite directions because lower rates bring more buyers back into the market. As demand increases, competition rises, and in a city like Philadelphia, multiple offer situations often return and prices tend to climb. Some economists estimate that for every 1% drop in mortgage rates, home prices can rise roughly 5–10%, depending on inventory levels, local demand, economic conditions, and other market factors. This matters because waiting for lower rates can backfire. Lower rates don't just mean lower payments. They often mean higher purchase prices and more competition. While you can always refinance a rate later if rates drop, but you can't go back and undo the price you paid. That's why you will often hear the phrase, “marry the home, date the rate.”
I've seen higher rates sideline many buyers, even though this market often offers less competition, more negotiating power, and better chances of price reductions or concessions. When rates fall, more buyers jump back in the market, which means more offers on the same properties you're looking at, and a lower chance of your offer being accepted. And, in the meantime of our clients who are still renting, I tend to remind them that you are not building equity, you are paying someone else's mortgage while your rent could be going towards your own mortgage. We've helped many clients go from years of being renters to first time home buyers, and their mortgage is actually less than what they were paying in rent. Of course, you have to factor in big costs like upkeep, replacing large appliances, paying for things that might have been taken care of on your lease- these are some of things you need to factor in when deciding if becoming a homeowner is right for you.
The bottom line is that waiting for the perfect market can mean paying more later, facing heavier competition, and losing leverage. The right time to buy is not about timing the market. It is about when you are ready. We have more details about the home buying process in our Buyer's Guide under our Resources Tab, and we also have a physical copy of our Pathway to Purchase book that we'd be happy to mail you.
