The Pros and Cons of Waiting for Interest Rates to Drop Before You Buy a Home


Are you thinking of buying a home in 2023, but waiting for interest rates to drop? You’re not alone. At the Potempa Team, we talk to people all the time who want to make their homeownership goals a reality. If they haven’t made a move yet, it’s often because they’re trying to “time the market” and wait for either interest rates or home prices to drop. Sometimes both!

On the surface, waiting for interest rates to drop seems like a sound idea. Interest rates directly affect your purchasing power after all. However, you should be aware that waiting for interest rates to drop before you buy a home comes with its own pros and cons.


Pro: You Can Afford More Home for Your Money

Simply put: when interest rates rise, it’ll cost you more to afford the same home. That means higher interest rates may put your dream home or community out of your reach. When you start the home purchase process with the Potempa Team, we’ll provide you with a pre-approval up to a certain loan amount. We take into account current interest rates to determine a loan amount that fits into your financial picture. As interest rates rise, your top-end loan amount will typically decrease to compensate for the added interest cost. Even a small increase in mortgage interest rates can have an impact on what you can afford to buy.

Pro: If Another Move is in Your Future, Renting May Be the Better Option

Buying a home isn’t always the right choice. If you’re not planning to stay in an area long-term because of military relocations, job transfers, or other personal plans in the future, purchasing a home with a high-interest home loan may not make the most sense. An experienced lender who places a high value on customer service like the Potempa Team will be able to help you understand your options and give you the insight you need so you can make an educated decision. When we meet with a client, we take the time to understand their current situation, their plans, their goals, and their comprehensive financial picture so we can serve them in the best way possible. We put you first, always.

Con: You May Miss Out on Your Dream Home

You may have heard this saying, “marry the house, date the rate.” What that means is, if you find a home you love and can afford, don’t let higher interest rates prevent you from making an offer! Every home is unique and waiting to purchase may create regret.

Interest rates go up and down in response to economic factors. While rates may currently be on an overall upward trend, everything that goes up, eventually comes down. When rates decrease, you may be able to refinance and lock in a new lower rate for your dream home. That’s what people mean when they say, “date the rate.” Your current higher interest rate doesn’t have to be your forever rate. That’s why it’s important to work with a qualified and experienced lender like the Potempa Team to help you look at the big picture and create a plan to buy your dream home.

Con: You’re Not Building Equity and Wealth

One of the biggest negatives about waiting to buy a home is that you delay the start of your wealth-building journey. When you own a home, you start creating equity almost right away. When you sell, that equity can be potentially reinvested into other things like a larger home, an investment property, or even a business.

If you’re currently renting, the truth is that you’re still paying a mortgage. It’s just not your own. So, you miss out on the potential benefits of creating your own equity. Over time, this can have an impact on the overall wealth you’re able to create for yourself and your family.


Have you been waiting for interest rates to drop before you buy a home in 2023? Get in touch with us today for a no-obligation consultation. We can help you make sense of the current market and if you’re ready to move forward, we can get you pre-approved to buy your dream home.

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