Is Now the Right Time to Buy a Home? Unpacking the Real Reasons Buyers Are Waiting

Watch the full episode for a deep dive into how interest rates and mindset are shaping today’s housing market.

The Current Market Reality: High Mortgage Rates, Low Affordability

Mortgage rates are up. Affordability is down. And for many potential buyers, homeownership feels like it's slipping further out of reach. But are market conditions truly the problem, or is something deeper at play?

The team at The Educated Homebuyer podcast breaks this down in detail. While rates and home prices are major talking points, what keeps most buyers on the sidelines isn't just math—it's mindset.

The Narrative We've Been Sold: "I'll Buy When Rates Drop"

For years, buyers have said the same thing: "I'll wait for lower interest rates." But here's the problem—many of those same people said that when rates were at 3%. Now, with rates hovering between 6.5% and 7%, the psychological hurdle feels even higher.

According to Josh Lewis, this isn't just about numbers. It's fear—fear of making a mistake, of buying at the wrong time, or of being pressured into a big decision without all the facts.

Buyer Psychology: The Real Barrier to Entry

Survey Data Confirms the Disconnect

A recent survey by Maxwell asked over 1,000 potential buyers what interest rate would make them comfortable entering the market. The #1 answer? 5.5%.

The reality: to hit 5.5%, we’d need a 10-year Treasury rate of around 3.25%, a full percentage point lower than current levels. And that doesn’t factor in mortgage-backed securities and market volatility.

Why That "Magic Number" Might Never Come

Most people choose 5.5% because it feels right—not because they’ve done the math. Very few have spoken to a mortgage professional to understand what they can actually afford today.

Waiting for a perfect number means many buyers will miss opportunities to buy now and refinance later. Worse, it could mean buying into a hotter, more competitive market later.

Breaking Down Affordability: More Than Just the Rate

Three Key Factors That Drive Affordability

1. Interest Rates – Affects your monthly payment directly. A 1% change in rates can increase or decrease your buying power by tens of thousands of dollars.
2. Home Prices – Inventory and demand continue to push prices up, even with high rates.
3. Income/Wages – Wage growth hasn’t kept up with the rapid increase in home prices.

Real-World Example: Buying Power in 2019 vs. 2024

• 2019: $450,000 home, 3.75% rate = $2,085/mo (P&I)
• 2024: $450,000 home, 6.75% rate = $2,918/mo (P&I)

That’s an $833/month increase for the same home.

However, if that same home appreciated just 3% annually over five years, it's now worth over $520,000. So waiting doesn’t just cost more monthly—it costs equity too.

The Myth of the Market Crash: Why Prices Aren’t Dropping

A Look Back at 2008 vs. Today

Josh points out that people waiting for a 2008-style crash are ignoring key differences. In 2008:

• There was widespread mortgage fraud and zero-down loans
• Buyers weren’t qualified properly
• Inventory was flooded with foreclosures

Today:

• Buyers are vetted and financially stable
• Inventory remains critically low
• Most homeowners have locked in low rates and have significant equity

Why Prices May Stay High Despite Higher Rates

According to Jeb, even in higher-rate environments, desirable homes are still moving quickly. He recently sold a home with over 40 showings in one weekend. Why? Turnkey homes in good areas are scarce.

So as rates drop, more buyers will re-enter the market, but inventory won’t keep pace—putting upward pressure on prices.

Real Numbers: What Happens When Rates Drop 1%?

Every 1% drop in interest rates adds roughly 4 million potential buyers to the market. That’s 4 million more people competing for the same limited homes.

If you're waiting to buy until "it feels better," be prepared for more competition and higher prices when it finally does.

The Case for Buying Now: Real Stories, Real Data

Jeb’s Personal Experience Buying at the "Top" of the Market

In 2023, Jeb bought a $1.5M home when rates were high. Everyone told him he was crazy. But 18 months later:

• Homes in the neighborhood are listing for $1.6M+
• He refinanced twice, saving $900/month

He didn’t wait for perfect timing. He made the move that aligned with his life—and it paid off.

The Power of Time in the Market

Waiting for perfect timing is a gamble. Being in the market gives you:

• Principal paydown (forced savings)
• Equity through appreciation
• The opportunity to refinance when rates drop

You don’t need to time the market. You need to spend time in the market.

Real Buyer Stories: Multiple Offers Are Back

Josh shares recent examples of buyers facing multiple offer situations in San Diego and Maryland—even with rates around 6.75%.

That means people are buying. And they’re buying now. The difference? They’ve run the numbers, gotten pre-approved, and made an informed decision.

Buying vs. Renting: Which Builds Wealth Faster?

Renting May Feel Safer, But It's Not Cheaper in the Long Run

Consider this example:

• Rent: $2,500/month with 4% annual increases = $182,000 paid over 5 years
• Mortgage: $3,000/month with $800/month going to principal = $180,000 paid, $48,000 in equity gained

Plus:

• Rent is 100% interest
• Mortgage builds equity and appreciation

Renting Locks You Out of Appreciation

Over the last decade, home prices in many metro areas have doubled. Renters miss out on that entirely. Meanwhile, homeowners benefit from:

• Fixed costs
• Tax write-offs
• Wealth-building equity

Getting Clarity: What Buyers Need to Do Right Now

Step 1: Get Pre-Approved and Know Your Numbers

Don’t pick a rate out of the air. Run the numbers at today’s rate, then model what happens if you refinance at 6%, 5.5%, or 5%.

This gives you confidence and a plan. And it may show you that you can afford more than you think right now.

Step 2: Work with People Who Know the Market

Your loan officer and agent should own real estate and have years of experience navigating different markets. This isn’t the time for rookies.

Step 3: Build a Long-Term Strategy, Not a Short-Term Bet

If you have job stability, plan to stay 5+ years, and can afford the payment: it may be the right time to buy.

Don’t buy out of fear. But don’t wait because of it either.

FAQs Buyers Are Asking Right Now

Q: What if I buy now and rates drop?
You can refinance. That’s exactly what many buyers are doing. Every 0.5% drop in rates could save hundreds monthly.

Q: Should I wait until I have 20% down?
Not necessarily. Many buyers purchase with 3-5% down. Waiting to save more may cost more in rising home prices.

Q: What if prices go down after I buy?
If you're in the home for 5+ years, short-term drops don’t matter. Your equity grows through principal paydown and eventual appreciation.

Final Thoughts: Why Ownership Still Matters

Even in today’s high-rate environment, the fundamentals of real estate remain strong:

• Fixed housing costs
• Tax advantages
• Long-term appreciation
• Pride of ownership

Jeb and Josh remind listeners that homeownership is still one of the most reliable paths to building wealth in America.

And while affordability is a real issue (it takes 79% more income today to buy the median home than it did five years ago), the solution isn’t to wait for a crash—it’s to take control of what you can control.

So if you're one of the 77% of buyers who say you're financially ready but just "watching the market," it's time to stop watching and start planning.

Want to Know if Buying Makes Sense for You?

Talk to our team. We'll help you:

• Get clear on your budget
• Understand your real options
• Set a game plan for when the time is right

CTA: Use the link in the description to connect with us today. Let’s build your path to ownership—on your terms.