1. Less Competition
- Many buyers are sitting on the sidelines waiting for rates to fall.
- Buying now means fewer bidding wars and more room to negotiate on price or seller-paid closing costs.
2. Home Prices Are Still Rising
- Twin Cities home prices rose 3.5% year-over-year and are expected to climb another 2–5% in 2025.
- Waiting could mean you’ll pay more for the same home later—even if your rate is lower.
3. Refinance Later
- You can buy now and refinance when rates drop. This strategy locks in today’s home price and equity gains.
- If rates drop to 5% later, you’ll benefit without competing in a crowded market.
4. Building Equity
- Every mortgage payment builds home equity, which is better than renting with no return.
- Real estate historically appreciates, offering long-term financial growth.
5. Tax Benefits
- Homeownership offers potential deductions on mortgage interest and property taxes, which renters don’t receive.
Risks of Waiting for Rates to Drop
1. Increased Competition
- A rate drop will bring more buyers into the market, triggering multiple offer situations and price surges.
- You may have to offer over asking, waive contingencies, or escalate beyond your budget.
2. Uncertain Timing
- It’s unclear when rates will drop—or by how much. You could wait 6–12 months or longer with no significant rate relief.
3. Higher Prices
- As prices continue to rise, you may pay more overall, even with a slightly better rate.