Should You Buy a Home Now or Wait for Mortgage Rates to Fall?

It is understandable if you are uncertain about when to pull the trigger on that home purchase. The uncertainty in nearly all aspects of the economy and rising interest rates have many people rethinking that decision to buy now. But what if you wait and the rates inch up even further? Here are a few things to keep in mind if you are in the market for a new home.

Should You Buy That House Now or Wait for Lower Interest Rates?

Timing a home purchase is difficult, even in the best of economic conditions. The summer buying season is over, leaving what is typically one of the quietest times of the year for real estate. The fall is likely to be even quieter, thanks to a sluggish economy and widespread jitters about where the housing market is headed.

Mortgage rates have also been on a steady upward climb. According to NerdWallet, the average rate for a 30-year fixed mortgage is approximately 7.05% as of the middle of September. While housing prices are still slowly climbing in most markets, the median price per square foot has fallen slightly.

For those on the fence, the big question is whether you should wait until later in the fall to sign on the dotted line. Many prospective buyers held off this summer hoping that interest rates would come down again. Instead, the opposite happened, and they have continued to climb.

The Federal Reserve will meet again on September 15 and 16 to determine if it will raise the interest rate of the central bank. Based on the latest round of economic data, most economists expect the Fed to raise the benchmark rate. Although the Fed does not directly set mortgage rates, the bank's benchmark guides the cost of borrowing across many sectors.

Factors Other Than Interest Rates to Consider

Fall is typically a good time for buyers as the inventory levels tend to drop heading into the even quieter holiday season. Fewer buyers competing for the prime homes means that sellers may be forced to settle for a lower price point.

Housing supply continues to surge, making it more of a buyer's market. According to the National Association of Realtors (NRA), housing supply hit 1.62 million available homes at the end of August 2026, translating to a 4.9-month supply at the current sales pace. This volume is up 3.2% from July and 5.9% higher than August 2025. In addition, August marked the first time since November of 2021 that total inventory eclipsed 1.6 million units.

Given all of these factors, it is also not surprising to learn that home prices tend to dip during the fall and winter months. The national average home price fell by roughly $10,000 between August and September last year before bottoming out at the lowest point between November and February.

While interest rates are on the upswing, lower prices in the fall could help to negate those bumps. This is why it is always a good idea to work with an experienced professional to run the numbers for your specific financial situation.

Because the market is so unpredictable, it is generally advised not to wait if you find the perfect house for your needs. This is assuming that the home is within your budget.

Although it may be tempting to want to try to wait for interest rates to slide again, it is important to remember that today's rates are actually near the historic average. Most economists are not forecasting that rates will fall to the low levels seen a few years ago. Those record-low rates may be a dream not worth chasing at this point.

Other prospective buyers may decide to buy now so that they can start building equity. While you may save a few thousand dollars waiting until winter to make the purchase, you will also be missing out on a few months of equity building.

The housing market is always going to ebb and flow. Interest rates will always jump around. But history has shown us that the housing market generally takes care of itself in the long run.

The bottom line is that there is never a perfect time to buy a home. The best decision that you can make is one that aligns with your personal financial situation and goals, combined with what is happening currently in your market.

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