Should You Wait for Better Rates Before Buying a Home?

By Kyle Koller

Producing Branch Manager of UMortgage West - The #1 Producing Team at UMortgage

Mortgage rates are climbing again in 2025, and for many buyers, that raises a tough question: Should you wait or act now?

It might seem smart to hold off, but that strategy could cost you more than you think. Today, I’ll discuss why rates are rising and how to stay one step ahead

Why are mortgage rates rising? Let’s break down what’s going on with rates, what it means for your monthly payment, and why holding out for a better deal might actually backfire.

• Stubborn inflation. Even though inflation has eased from where it was a year or two ago, it’s still too high for the Federal Reserve’s comfort. As long as inflation stays sticky, the Fed will keep interest rates higher to cool off spending.
• Strong economic data. Job growth and consumer spending have remained surprisingly strong since 2024. This delays the Fed’s ability or willingness to start cutting rates in 2025, as they wait for clearer signals of a slowdown.
• Resilient housing demand. There’s still strong demand for housing, especially with inventory staying low. So even with higher borrowing costs, prices aren’t falling much, and in some areas, they’re still rising.

What does this mean for buyers? Every 1% jump in mortgage rates can add hundreds to your monthly payment.

But there’s another layer: When rates finally fall, buyers will come flooding back into the market fast. And yes, they really will. That’s when you’ll start seeing bidding wars, price hikes, and even waived contingencies all over again.

In other words, by the time rates drop, you’ll be competing against a much more crowded field.

How do you outsmart higher rates? You don’t have to overpay or sit it out. Here are four ways to work around rising rates:

• Temporary buydowns. Negotiate with the seller to cover a one or two-year buydown. That means you pay less up front, giving you time to adjust or refinance later.
• Seller credits. Many sellers are offering concessions. Use them to reduce your interest rate or cover your closing costs.
• Refinance later. The key is locking in a home you actually want now. If rates improve later, refinance. Just make sure you’re comfortable with the current payment first.
• Act while competition is low. With less competition and more homes sitting on the market, now is a rare moment of balance between buyers and sellers. It’s a chance to buy without the chaos.

Trying to perfectly time the market almost never works. The better move is this: Buy when you find the right home, and use creative strategies to make the numbers work.

If you do, you’ll already be living in the home you want by the time everyone else jumps back in and you’ll be ready to refinance when the timing is right.

If you want a custom plan built around your specific needs, let’s talk. Book a free 1:1 call with me using this link: Schedule a 1:1 call with Kyle. You can also reach me at (801) 687-2018 or kkoller@umortgage.com. I’ll help you explore options based on where the market is and where it’s headed.