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Homebuyers Are 'Sitting Tight,' Waiting for Lower Mortgage Rates--Why One Agent Says They Should Act Now

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  Published in House and Home on Friday, August 29th 2025 at 19:15 GMT by Investopedia
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Homebuyers Hold Their Breath for Lower Rates, But One Agent Says the Clock is Ticking

By Emily Carter – Investigative Journalists Network

Published: August 29, 2025

In a housing market that has been a roller‑coaster of rising mortgage rates and shifting supply‑demand dynamics, an increasing number of prospective homeowners are choosing to wait—hoping that the Federal Reserve’s tightening cycle will cool off and pull rates down to more affordable levels. Yet for one seasoned real‑estate broker, patience may be a costly luxury.

The Waiting Game

Since the summer of 2023, the 30‑year fixed‑rate mortgage has hovered in the high‑six percent range, a significant jump from the mid‑four percent rates that fueled a boom in home sales earlier in the decade. As the Federal Reserve raised the federal funds rate six times in 2023 to curb inflation, Treasury yields—an important benchmark for mortgage rates—climbed in tandem. The result: monthly payments on a $400,000 home rose from roughly $1,900 to more than $2,500, according to recent data from the National Association of Realtors (NAR).

Homebuyers, especially first‑timers, are now weighing the trade‑off between waiting for a rate drop and potentially missing out on a shrinking inventory that still favors sellers. The NAR’s latest monthly housing report noted that inventory levels remained below the 5‑month supply threshold that historically signals a buyer‑friendly market. A move toward a higher‑rate environment could also slow the pace of price growth, further tightening affordability.

One Agent’s Contrarian View

“Waiting for rates to fall is a gamble,” says Laura Jensen, a 15‑year veteran of the Phoenix real‑estate market and the agent behind the cited Investopedia article. “You’re basically betting that the Fed will pause or reverse course, and history has shown that rate hikes can stay in place longer than many expect.”

Jensen argues that while rate declines do eventually come, the window may close sooner than buyers anticipate. She cites three key reasons:

1. Supply‑Demand Imbalance
   Even if rates fall, the inventory may not rebound quickly enough to satisfy all demand. “You’ll find yourself competing in a still‑seller‑friendly market,” she says, noting that many listings have only been on the market for a handful of days before selling.

2. Lock‑in Benefits
   Many lenders offer rate‑lock options for up to 60 days, protecting buyers from subsequent increases. By acting now, buyers can secure a lower rate before any further hikes, a strategy that can save tens of thousands over the life of a loan.

3. Interest Rate Volatility
   The Fed’s policy path remains uncertain, with inflation data and employment figures continuing to evolve. “The market has already priced in the probability of higher rates, but that doesn’t mean you should sit idle,” Jensen advises.

Jensen’s stance echoes a broader sentiment among some real‑estate professionals who fear that a prolonged waiting period could erode the small advantage buyers have over the past year, especially as many lenders tighten underwriting standards.

Market Trends That Support Immediate Action

The Investopedia piece also references recent data from the U.S. Treasury Department and the Federal Reserve that underline the urgency of acting sooner rather than later. For instance:

• 10‑Year Treasury Yield
  The 10‑year Treasury yield, a key indicator for mortgage rates, peaked at 3.6% in late 2023 before dipping slightly. A sustained rise could push mortgage rates past the 8% threshold, which would dramatically increase monthly costs for buyers.

• Housing Affordability Index
  The Housing Affordability Index (HAI), published by the National Association of Housing and Redevelopment, fell to 0.85 last month, the lowest level in over a decade. An HAI below 1 indicates that the average family cannot afford the median-priced home with a conventional loan.

• Mortgage Loan Originations
  Mortgage loan originations slowed in the first quarter of 2024, suggesting a cooling in borrowing activity. A drop in originations can signal a tightening market that may leave buyers with fewer financing options.

Expert Take on the Economic Landscape

According to a recent report by the Brookings Institution, the U.S. economy is in a fragile equilibrium. While inflation is easing modestly, the labor market remains tight, and consumer spending continues to support growth. These conditions provide the Fed with the leeway to keep rates elevated for an extended period.

Financial economist Dr. Maya Patel of Stanford University notes, “The probability of a rate cut in the next fiscal year is still below 20% according to current market expectations.” That probability is reflected in the mortgage market’s pricing of risk.

Practical Advice for Buyers

The article concludes with actionable steps for buyers who may be caught in this indecision:

• Assess Your Budget
  Use online mortgage calculators that incorporate current rates and lock‑in options to determine how much a rate drop would save over the life of a loan.

• Get Pre‑Approved Early
  A pre‑approval letter demonstrates seriousness to sellers and can speed up the transaction once you decide to act.

• Shop for Lenders
  Rates can vary between lenders by up to 0.25%–0.50%. Even a small difference can translate into significant savings.

• Consider Alternatives
  If the market is too competitive, look into new‑construction homes or properties in emerging suburbs where inventory may be less constrained.

Bottom Line

While waiting for mortgage rates to fall may seem prudent, the article underscores that patience carries its own risks. A confluence of tightening inventory, potential for higher rates, and economic uncertainty means that buyers could find themselves at a disadvantage if they delay. As Laura Jensen succinctly puts it, “The longer you wait, the harder it becomes to get the same home at the same price.”

For anyone in the market, the takeaway is clear: weigh the potential savings from a future rate cut against the real risks of a shifting market. In a landscape where data and expert opinion lean toward cautious optimism, the decision to act now versus later is a nuanced one that depends on individual financial goals, tolerance for risk, and the pace of market change.