The Cost of Waiting for Mortgage Rates To Go Down

The Cost of Waiting for Mortgage Rates To Go Down

  • John Bathurst Group
  • 10/21/22

If you’re in the market for a new home, you may be wondering if now is the time to buy or if you should wait for mortgage rates to go down. While there’s no crystal ball that can tell us exactly what will happen with rates in the future, we do know that rates have been on the rise in recent weeks.

If you’re debating whether to buy now or wait, it’s important to consider the potential cost of waiting. As rates go up, so does your monthly payment. If you wait too long, you may end up paying more than you would have if you had bought when rates were lower.

Of course, there’s no way to know for sure what mortgage rates will do in the future. If you wait for rates to go down and they don’t, you may end up missing out on your dream home. There’s also the opportunity cost to consider – if you wait too long, you could miss out on a great deal on a home that you love.

If you’re considering buying a home, the best thing to do is to speak with a local mortgage professional who can help you understand your options and find the right loan for you. They can also help you determine if now is the right time for you to buy based on your unique circumstances.

Don’t let rising mortgage rates keep you from achieving your homeownership dreams. Work with a professional who can help you navigate the market and find the right loan for you.

As mortgage rates rise, they impact your purchasing power by raising the cost of buying a home and limiting how much you can comfortably afford. Here’s how it works.

Let’s assume you want to buy a $400,000 home (the median-priced home according to the National Association of Realtors is $389,500). If you’re trying to shop at that price point and keep your monthly payment about $2,500-2,600 or below, here’s how your purchasing power can change as mortgage rates climb (see chart below). The red shows payments above that threshold and the green indicates a payment within your target range.

As the chart shows, as rates go up, the amount you can afford to borrow decreases and that may mean you have to look at homes at a different price point. That’s why it’s important to work with a real estate advisor to understand how mortgage rates impact your monthly mortgage payment at various home loan amounts.

Are Mortgage Rates Going To Go Down?

The rise in mortgage rates and the resulting decrease in purchasing power may leave you wondering if you should wait for rates to go down before making your purchase. says this about where rates could go from here:

“Many homebuyers likely winced . . . upon hearing that the Federal Reserve yet again boosted its short-term interest rates by three-quarters of a percentage point—a move that’s pushing mortgage rates through the roof. And the already high rates are just going to get higher.


So, if you’re waiting for mortgage rates to drop, you may be waiting for a while as the Federal Reserve works to get inflation under control.

And if you’re considering renting as your alternative while you wait it out, remember that’s going to get more expensive with time too. As Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), says:

“There is no doubt that these higher rates hurt housing affordability. Nevertheless, apart from borrowing costs, rents additionally rose at their highest pace in nearly four decades.”


Basically, it is true that it costs more to buy a home today than it did last year, but the same is true for renting. This means, either way, you’re going to be paying more. The difference is, with homeownership, you’re also gaining equity over time which will help grow your net worth. The question now becomes: what makes more sense for you?


John Bathurst is a real estate professional with years of experience in the industry. When it comes to finding a home, John knows the ins and outs of the process and can help make your search as seamless as possible. If you're looking for someone to help guide you through your home search journey, John is your guy!

John Bathurst
Luxury Real Estate Advisor | Principal | John Bathurst Group | Founding Member | Compass South Bay | DRE# 01977487
Mobile: 310.594.5705
Email: [email protected]



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