The instinct is reasonable. Rates are higher than they were three years ago. You don’t want to lock in at the top. So you wait.
The trap is that you’re optimizing for one variable in a system with three.
What you’re actually trading
Three things move while you wait:
- The rate — could go down, up, or sideways. Nobody knows.
- The price — in most U.S. markets, including Phoenix, has appreciated 3–5% per year over the past decade. Some years more, some less.
- Your time in the home — every month you wait is a month you don’t own equity in the place you’re going to live in anyway.
The buyer who locks in at 7.5% on a $500,000 home and holds it for 10 years builds equity. The buyer who waits two years for a 6.0% rate and buys the same home — now $540,000 due to 4% annual appreciation — pays $40,000 more in price. The lower rate saves about $450/month, which sounds great, but the higher purchase price means a bigger loan amount, and you’ve handed two years of rent to a landlord building someone else’s equity.
Run the actual numbers and the math is often a wash, sometimes a loss. The “waiting for rates” buyer rarely comes out ahead unless rates drop significantly and prices stay flat — a combination that rarely happens together.
What the smart move actually looks like
If you’re going to live somewhere for 5+ years, the rate matters less than the timing of the purchase. You can refinance the rate later. You can’t refinance the price you paid.
This isn’t a sales pitch to buy now regardless. It’s the actual math. Some buyers should wait — those whose income isn’t ready, whose credit needs work, who don’t know if they’ll stay in the area. For those people, waiting is right.
But if you’re financially ready and just waiting on the rate, you’re playing a game with three variables and pretending it has one. Run the math on what your monthly cost looks like at today’s rate vs. what it’d look like at next year’s hypothetical rate plus 4% appreciation. Decide from there.
The rate is one number. The decision isn’t.