Are you a homeowner in Kansas City looking to tap into your home’s equity? A…
Should You Buy a Home Now or Wait for Lower Rates?
Deciding when to buy a home is a major financial move, and timing can feel like everything. With mortgage rates shifting and home prices climbing, many buyers face a big question: Should I buy a home now or wait for better rates? It’s a tough call, and there’s no crystal ball—but we can break it down with pros, cons, and some real numbers to help you figure out what’s right for you.
I’m Rick Woodruff, a Senior Loan Officer (NMLS #248984), and I’ve helped countless people navigate this exact dilemma. Whether you’re itching to buy today or just weighing your options, let’s dive in and explore what makes sense in today’s market.
Why Buy a Home Now?
There’s a solid argument for jumping in sooner rather than later. Here’s why buying now could work in your favor:
- Secure Today’s Prices
Home prices tend to creep up over time—blame inflation, demand, or tight supply in many areas. Buying now locks in a price before it climbs higher. - Build Equity Faster
Start paying your mortgage, and you’re building equity right away—especially if values keep rising. Waiting just delays that payoff. - Fixed Costs, No Surprises
A fixed-rate mortgage keeps your payment steady, even if rates spike later. That’s stability you can count on. - Refinance Later
If rates drop down the road, you can refinance and lower your payment. Buy now, adjust later—it’s a win-win. - Beat the Rush
Waiting for lower rates might mean more buyers flood the market, pushing prices up and competition through the roof. Acting now could dodge that chaos.
Why Wait for Lower Rates?
On the other hand, holding off has its perks. Here’s what waiting might get you:
- Cheaper Monthly Payments
Lower rates mean a smaller mortgage bill each month, giving your budget some breathing room. - Bigger Loan Potential
A rate drop could boost your borrowing power, letting you aim for a pricier home without stretching thin. - Market Timing
If you suspect a slowdown or price dip is coming, waiting might score you a bargain—if you guess right.
The Numbers: What’s the Difference?
Let’s get practical with a side-by-side look. Say you’re eyeing a $400,000 home today with a 30-year fixed mortgage rate at 6.375% (a realistic rate as of March 27, 2025). If you wait, assume prices rise 5% per year (based on historical trends), and rates fall to 5.875% in one year and 5.375% in two. Here’s how it shakes out:
| Scenario | Home Price | Interest Rate | Loan Amount (20% Down) | Monthly Payment (P&I) | Total Interest Paid (30 Years) |
|---|---|---|---|---|---|
| Buy Now | $400,000 | 6.375% | $320,000 | $1,996 | $398,708 |
| Wait 1 Year | $420,000 | 5.875% | $336,000 | $1,987 | $379,420 |
| Wait 2 Years | $441,000 | 5.375% | $352,800 | $1,975 | $358,108 |
Notes: Assumes a 20% down payment ($80,000 now, $84,000 in 1 year, $88,200 in 2 years). Payment covers principal and interest (P&I) only—taxes and insurance excluded for simplicity.
Quick Takeaways:
- Monthly Cost: Buying now is $1,996/month—barely $9 more than waiting one year ($1,987) and $21 more than two ($1,975). Not a dealbreaker.
- Interest Over Time: Waiting saves you $19,000 in interest after one year, $40,600 after two—but only if you don’t refinance later.
- Price Jump: Waiting costs you $20,000 more in one year, $41,000 in two, which could cancel out those interest savings.
Beyond the Numbers
Waiting might trim your interest, but rising prices could eat that up fast. Picture this:
- Buy now at $400,000, refinance in two years at 5.375%, and you’re still ahead of paying $441,000 for the same house later.
- Renting while you wait? That’s $1,500–$2,000/month—or $18,000–$48,000 over one to two years—cash that doesn’t build you anything.
Buy a Home Now or Wait? Final Thoughts
So, should you buy a home now or wait? It’s all about what you value and where your market’s headed.
- Buy Now if you want today’s price, equity growth, and the chance to refinance later. At 6.375% (as of April 2, 2025), with prices still trending up, this could be the move.
- Wait if you’re banking on a big rate drop, can swing renting longer, and don’t mind risking higher prices.
No one-size-fits-all here. Run your own numbers—think about how long you’ll stay—and talk to a financial advisor or real estate pro. In today’s market, buying now might just edge out waiting for many buyers. Your call!
Let’s Chat About Your Next Step
I’m Rick Woodruff, Senior Loan Officer (NMLS #248984), and I’d love to help you make this decision. Reach out at (913) 871-5370 or email me at rickw@emetropolitan.com. Check out emetropolitan.com for more. Let’s get you closer to homeownership!
Related Posts
