For years, we saw record-low mortgage rates in the 2-3% range, but it’s safe to say those days are behind us—for now. If you’ve been holding off on buying, hoping for lower rates or more market stability, you’re not alone. However, there’s more to the decision than just interest rates. Let’s break down why waiting might cost you more in the long run.
The Cost of Waiting: A Real-Life Example
Many buyers hesitate due to financial concerns, whether it’s home prices or mortgage rates. But what if waiting actually puts you at a disadvantage? Let’s look at how delaying your purchase could impact an $800,000 home with a 10% down payment, assuming a conservative 2.5% annual appreciation and a 0.5% decrease in mortgage rates per year:
2025: $800,000 home | 10% down ($80,000) | 6.75% interest → $5,284/month
2026: $820,000 home | 10% down ($82,000) | 6.25% interest → $5,172/month
2027: $840,500 home | 10% down ($84,050) | 5.75% interest → $5,056/month
Yes, your monthly payment would decrease slightly over time, but here’s what you’d be giving up: $40,000 in home equity in just two years. And that’s based on a modest 2.5% appreciation—Colorado’s market could easily see higher growth. Meanwhile, no one can predict where mortgage rates will go for certain.
Time in the Market Beats Timing the Market
Real estate is a long-term investment, and as the saying goes, “time in the market” is more important than “timing the market.” By waiting, you risk losing out on appreciation, equity, and potential tax benefits—all while renting or staying in a home that may not suit your needs.
Leverage Your Home Equity for a Smart Move
If you already own a home, chances are you’ve built significant equity over the past few years. That equity can be a powerful tool when moving up or downsizing. Even if you’re currently locked into a low mortgage rate, here’s a way to make your next home purchase more affordable: buying down your rate.
See my previous blog post on doing a 2/1 buydown here.
Using our $800,000 home example, purchasing today with a 10% down payment means a $720,000 loan at 6.75% interest. But by using $28,800 (four discount points) from your equity, you could lower your rate to 5.75%, dropping your monthly payment from $5,284 to $4,795. A trusted lender can walk you through different scenarios to see what makes the most sense for you.
Beyond the Numbers: Does Your Home Fit Your Lifestyle?
Finances are key, but they’re not everything. Ask yourself:
Does your current home meet your space, location, and lifestyle needs?
Would moving closer to family, work, or outdoor activities improve your quality of life?
Would a new home give you greater functionality or convenience?
The right time to buy isn’t just about the market—it’s about what’s right for you.
Let’s Talk About Your Next Move
If you’re considering buying or selling, I’d love to help you weigh your options. Whether you want to explore your buying power, run the numbers, or discuss strategies, I’m here to guide you.
Let’s chat and create a plan that works for you.
📩 Reach out today to start the conversation!
Kelly McCallister, Realtor // Kelly.McCallister@8z.com // 303-517-5524 // buy. sell. invest.
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