The Truth About Rates
Enrique FloresOne of the most common concerns first-time homebuyers share is that interest rates feel too high. It’s true that a lower rate can save you hundreds of dollars each month on your mortgage payment. However, focusing solely on rates overlooks other major factors that can cost you far more in the long run.
1. Home appreciation and inflation
The average U.S. home appreciates about 4–5% per year. That means a $1 million home today could be worth $50,000 more in just one year. In two years, that’s $100,000 more in price. Over a 30-year mortgage, paying an extra $100,000 for the home can also mean paying roughly another $100,000 in interest. That’s a $200,000 cost for waiting.
2. Your happiness
Even if your rate is higher right now, buying allows you to start making memories and enjoying your new home immediately. The comfort, stability, and lifestyle benefits that come with homeownership can’t be measured in dollars alone.
3. Closing costs
When rates drop, the market often floods with buyers, and sellers are far less likely to offer credits toward closing costs. In the current market, it’s still possible to negotiate substantial seller credits — sometimes $20,000 to $30,000 — which can significantly reduce the cash you need to bring to closing.
Bottom line
While interest rates matter, they are just one piece of the puzzle. Home appreciation, potential seller credits, and the value of enjoying your home now can far outweigh the perceived savings of waiting for rates to drop.
