Interest Rates May Remain Elevated
No one can predict the exact path of interest rates. However, two major forces may keep them higher than many expect.
- Inflation Risks. Inflation reports still show elevated prices. When tariffs (taxes on imported goods) increase, businesses often pass that cost to consumers. That cycle pushes inflation higher, which usually causes interest rates to remain elevated.
- Government Debt. Our country continues to issue a large supply of government bonds to cover the national budget deficit. With so many bonds flooding the market, borrowing costs—including mortgage rates and home equity loans—may stay high.
What Happens When Rates Drop?
Many buyers are waiting on the sidelines for lower rates. When rates finally move down, demand could surge overnight. That sudden wave of buyers will compete for the same homes, driving prices higher.
So while you may save a little on interest later, you could pay tens of thousands more for the home itself.
A Smarter Approach
Instead of waiting, consider a strategy that works in today’s market:
- Temporary Rate Buydowns. You can use part of your down payment (or even negotiate with the seller) to reduce your interest rate for the first 1–3 years.
- Future Refinancing. If rates drop later, you can refinance into a lower rate without missing today’s opportunities.
This approach helps you buy the home you want now while keeping flexibility for the future.
Final Thoughts
Higher interest rates may not disappear as quickly as many people hope. If you’re waiting for the “perfect” time, you could face even stiffer competition and higher prices down the road. Exploring smart financing options today may put you in a stronger position than waiting.
📩 Contact me today to evaluate your options and see how strategies like buydowns can help you win in this market.