When mortgage rates are higher than you’d like, waiting can seem like the obvious answer. Why buy a home now when you could wait for interest rates to come down? There’s just one problem. You probably won’t be the only buyer waiting. When mortgage rates decline, financing becomes more affordable for many buyers. That can bring people who have been sitting on the sidelines back into the housing market. More buyers can mean more competition for available homes. And when demand increases faster than the supply of homes available for sale, home prices can face upward pressure. So the question isn’t simply: “Should I wait for a lower mortgage rate?” A better question might be: “What could happen to home prices and competition if I wait?” For William Ryan Homes buyers financing through HLX Mortgage, there’s another factor to consider: eligible buyers may have access to a one-time refinance benefit if rates decline after purchasing, subject to current program terms and qualification requirements. That creates a very different way to think about buying a home with high interest rates.
What Happens When Mortgage Rates Fall?
Mortgage rates have a direct impact on how much it costs to finance a home. When rates fall, the monthly principal and interest payment on the same loan amount falls as well.
That can improve affordability and purchasing power for buyers. It can also change buyer behavior.
Federal Reserve research has found that housing demand is sensitive to changes in mortgage rates. During the unusually competitive housing market of 2020 and 2021, increased buyer demand was a major contributor to housing-market tightness, with lower interest rates among the factors stimulating demand.
In other words, lower rates are great when you’re looking at the mortgage payment. But you’re not buying a mortgage. You’re buying a house.
And if lower rates bring more buyers into the market, you may find yourself competing with more people for that house.
Lower Rates Don’t Guarantee a Less Expensive Home
This is where waiting gets complicated.
Imagine you’re considering a home today. You like the home. You can afford the payment. There’s inventory available, and you’re comfortable with the purchase price. But you’d really like a lower interest rate, so you decide to wait.
Six months later, rates decline. That’s good news. But what else happened during those six months?
Maybe nothing. Or perhaps other buyers who were waiting made exactly the same decision you did. They came back into the market.
Now there are more buyers looking at the same inventory. The home you wanted may no longer be available. Builder incentives may have changed. And depending on your local market, home prices could be different.
There is no guarantee that any of these things will happen. Housing markets are local, and home prices are influenced by inventory, employment, construction, population changes, consumer confidence, and many other factors in addition to mortgage rates.
But that’s exactly the point. Waiting for a lower rate doesn’t freeze everything else in place.
Today’s Higher Rates Can Mean Fewer Buyers Are Shopping
Higher borrowing costs can cause some potential buyers to delay their home search. For buyers who remain in the market, that can create a different shopping environment.
Depending on the community and local market, there may be more time to make a decision, different inventory choices, builder incentives, or opportunities that might become harder to find if buyer demand increases.
That doesn’t make a high interest rate good. It means the rate is only one part of the opportunity you’re evaluating.
Here’s the Number Buyers Sometimes Forget: The Home Price
Mortgage rates get enormous attention. But your purchase price matters, too.
Let’s say you purchase a home for $450,000 today. That’s the price you agreed to pay for the home.
If mortgage rates decline later, refinancing could potentially change the interest rate on your mortgage if you qualify and the financial benefits justify doing so.
But imagine waiting and purchasing that same home later for $475,000. A lower interest rate doesn’t make that additional $25,000 disappear.
That’s why homebuyers should consider home price and mortgage rate together, rather than treating the mortgage rate as the only number that matters.
You Can Potentially Refinance a Mortgage. You Can’t Refinance Your Purchase Price.
This is the idea at the heart of the strategy.
You may have an opportunity to refinance your mortgage later. You don’t get to refinance what you originally paid for your home.
Normally, there’s an important catch to the “buy now and refinance later” strategy. Refinancing can involve costs, and there is never a guarantee that rates will fall enough to make refinancing worthwhile.
That’s where financing a William Ryan Home through HLX Mortgage can make this conversation different.
HLX Mortgage Gives WRH Buyers Another Option
HLX Mortgage is William Ryan Homes’ affiliated mortgage resource and provides financing options for William Ryan Homes buyers.
Eligible William Ryan Homes buyers financing through HLX Mortgage may have access to a one-time refinance benefit, subject to the program’s current terms, qualification requirements, availability, and any applicable restrictions.
Instead of automatically waiting for lower rates, you can evaluate whether it makes sense to buy the home you want at today’s price. Then, if mortgage rates decline enough in the future, you can explore whether refinancing makes financial sense.
You’re not trying to predict the bottom of the housing market or the mortgage market. You’re evaluating the opportunity available right now while preserving a potential option if rates improve later.
What If Rates Don’t Come Down?
Never buy a home you can’t comfortably afford today because you’re assuming you’ll refinance later.
Mortgage rates aren’t guaranteed to decline. They could fall quickly, fall slowly, remain around current levels for years, or increase.
That’s why your purchase needs to make financial sense using the mortgage payment you’re actually agreeing to today.
The potential refinance is an added benefit, not an affordability strategy.
Waiting Has a Cost, Too
Buyers naturally think about the risk of buying. But it’s worth considering the risk of waiting as well.
Suppose rates decline and buyers who have been sitting on the sidelines decide it’s finally time to start looking. More buyers can mean more competition. More competition can mean less negotiating leverage. Stronger demand can also put upward pressure on prices when the supply of available homes doesn’t keep pace.
That doesn’t mean history will repeat itself or that prices will necessarily rise when rates fall. It does mean that “I’ll just wait until rates fall” isn’t a risk-free strategy.
Don’t Try to Time Two Markets at Once
Ultimately, buyers who wait are trying to time two things: the housing market and the mortgage market.
You want the house when its price is attractive. And you want the mortgage when its interest rate is attractive.
Getting both at exactly the right moment would be wonderful. Predicting that moment is another matter.
Instead, look at the opportunity available today. Can you comfortably afford the home? Is the home priced appropriately for the market? Are there current builder or financing incentives? Do you have more choices because fewer buyers are competing? Is the floor plan or homesite you want available? And if mortgage rates eventually fall, what refinancing options might you have?
Buying a Home With High Interest Rates May Give You Options You Haven’t Considered
Nobody wants to pay more interest than necessary.
But a higher-rate market can sometimes give buyers something that’s harder to find when rates are low: less competition.
And lower competition can create opportunities.
That’s why buying a home with high interest rates deserves a closer look before you automatically decide to wait.
With a William Ryan Home and financing through HLX Mortgage, eligible buyers may also have the added advantage of a one-time refinance benefit if rates decline in the future, subject to current program terms.
So instead of asking, “Should I wait until mortgage rates fall?” consider asking, “What could I gain by buying before more buyers come back into the market?”
Explore Your Options With William Ryan Homes
If higher mortgage rates have caused you to put your home search on hold, take another look at the entire equation.
Explore William Ryan Homes communities and see what homes, floor plans, homesites, and Quick Move-In opportunities are currently available.
Then learn more about HLX Mortgage and talk with an HLX Mortgage loan professional about current financing programs, available incentives, and the one-time refinance benefit.
The rate you see today isn’t the only number that matters. The price you pay for your home matters, too.
