Should you wait for mortgage rates to drop? Here's why some experts advise against it

Mortgage interest rates today may not be the same as recent historical lows but that doesn't need to push new potential homebuyers out of the market.

In fact, there are plenty of reasons why now could be a good time to start your search for the perfect home. Or, if you recently stopped browsing in anticipation of lower rates in the future, you may want to consider picking up the search again. Even with today's mortgage rates hovering around 7% APR, you can begin reaping the benefits of homeownership and potentially save by buying a house now.

Start comparing mortgage interest rates you can qualify for today here.

Should you wait for mortgage rates to drop? 

Here are a few reasons why experts say you may not want to wait for mortgage rates to drop before buying a home. 

There's no guarantee rates will go down

Federal interest rates, and the mortgage rates influenced by them, move in cycles. While we know mortgage rates have been much lower in the recent past, they've also been much higher historically. In fact, today's rates actually aren't that high compared to historical standards. 

While mortgage rates could begin to go down later this year (or next if the Fed stops raising rates) there's no way to say for certain whether they will or by how much. 

"Interest rate movements are extremely hard to predict, nobody predicted they would rise as fast as they did," says Colin Zizzi, CFP, founder of Zizzi Investments, so you shouldn't try to bet on them.

"My recommendation to my clients is always to buy a home when they are ready financially, and not based on where rates are currently at," Zizzi says.

See what mortgage rates are available for you here now.

Benefits for buyers today

While it's true that many buyers are facing challenges today from both elevated mortgage rates and a shortage of homes for sale in some markets, some experts believe there are still benefits buyers can take advantage of today.

"People need places to live, and depending on the local market, there's no guarantee that house prices won't have increased substantially while you're waiting for interest rates to decline," says Quinn Arnold, CFP, co-founder of Arnold and Mote Wealth Management.

In fact, you may be able to score some more competitive terms as a buyer in a high rate environment than you would otherwise.

"If you can get into a home today, it is a good time to buy because sellers are more flexible on price and terms than they have been for three years," says Deviree Vallejo, a Denver-based real estate expert. "So buyers may be able to get in at a lower cost basis, and of course you have the advantages of homeownership (building equity, tax write offs, etc)." Once rates go down, Vallejo says, even more interested buyers will make the market more competitive.  

You can always refinance

Of course, buying a home with a relatively high mortgage rate can have consequences for your finances long-term. The higher your mortgage rate, the more you'll pay over the lifetime of your loan — which may last decades.

Luckily, refinancing is always an option. If rates do go down in the future, you may be able to reduce your interest rate and save long-term. However, you should still do what you can to score the best rate today. "It may be possible to refinance the mortgage later if rates do decline, but you wouldn't want to count on that strategy, valid as it is," says Arnold. 

Even if you would like to refinance in the future, make sure you can afford to make your monthly payments over the entirety of your loan term. You don't want to count on refinancing in the next year or so, and remain stuck with a payment you can't afford.

Curious what refinancing options are available today? Start comparing available rates here now.

The bottom line

Though mortgage rates are up in 2023, experts say there's no reason for many potential homebuyers to wait. It's impossible to predict the future, so rates could remain high for longer than expected (or today's rates really are the new normal). But if buying a home is your goal — and within your budget — experts say the best time to buy is when you're financially ready and you can find a good deal. Regardless of the current interest rate environment, you can benefit from securing your home and beginning to build equity now.

Find out the best mortgage rates you can qualify for today here.