If you're thinking about buying a home in Phoenix's West Valley, you may be asking the same question many buyers are asking: Should I buy a home now or wait for mortgage rates to come down?

Mortgage rates absolutely matter. A lower rate can reduce your monthly principal-and-interest payment and increase your purchasing power. But mortgage rates are only one part of determining whether you can comfortably afford a home. Your income, debts, down payment, purchase price, taxes, insurance, and other expenses also matter. 

If you are spending your money on rent every month, the possible equity building that you are missing out on also factors in.  

Instead of trying to predict exactly what mortgage rates will do next, I encourage buyers to ask a different question:

Does buying a home make sense for me at today's numbers?

 

Don't Try to Time the Rate—Look at the Whole Picture

No one can know with certainty where mortgage rates will be when you're ready to buy. And the rate you personally receive isn't determined by the national average alone. Factors such as your credit, loan type, loan amount, and other details can affect the rate a lender offers you. 

Rather than making your entire decision around a future rate prediction, consider these three things.

1. Your Monthly Payment

Can you comfortably afford the payment at today's rate?

This is where speaking with a lender early in the process can be extremely helpful. Your lender can help you understand the loan programs available to you and estimate your payment based on your specific financial situation.

Remember to look beyond principal and interest. Depending on the property and loan, your housing expenses can also include property taxes, homeowners insurance, mortgage insurance, and HOA fees.

2. The Home and the Price

Can you find a home that meets your needs at a price that works for you?

Interest rates matter, but so does the amount you're borrowing. That's one reason I don't like looking at mortgage rates in isolation.

The goal isn't simply to get a particular interest rate. It's to find the right combination of home, price, financing, and monthly payment for your situation.

3. Your Timeline

Does buying make sense for your longer-term plans?

Your decision shouldn't be based only on what the housing or mortgage market might do next. Think about why you're buying, how financially prepared you are, and whether homeownership fits your plans.

Fannie Mae similarly recommends that prospective buyers evaluate their finances and affordability before beginning their home search, including preparing for the upfront and ongoing costs of owning a home.

What If Rates Come Down After I Buy?

You may have heard someone say, "Buy now and refinance later."

I wouldn't recommend buying a home you can't comfortably afford today based on the assumption that you'll be able to refinance later.  That's a recipe for disaster.

If mortgage rates decline enough in the future, refinancing may become an option. But refinancing means obtaining a new mortgage, and whether it makes financial sense will depend on your circumstances at that time.

Think of a future refinance as a potential opportunity—not part of the plan you need in order to afford the home.

So, Should You Buy Now or Wait?

Start by asking yourself:

  • Can I comfortably afford today's payment?
  • Do I have the cash I need to buy, including my down payment and closing costs?
  • Can I find a home that fits my needs at a price that works?
  • Does buying fit my longer-term plans?

If the answer is yes, it may be worth exploring your options now rather than putting your home search on hold solely because you're hoping for a lower mortgage rate.

If the numbers don't work comfortably—or you're simply not ready—waiting may be the smarter move.

Buying a Home in Phoenix's West Valley

If you're considering a home in Goodyear, Buckeye, Surprise, Avondale, or another West Valley community, your decision involves more than the national mortgage-rate conversation.

The homes available in your price range, seller concessions, new-construction incentives, HOA costs, property taxes, and your financing can all affect the bigger picture. Those factors can also vary considerably from one home or community to another. 

Side Note: New construction builders often have special reduced interest rates and/or incentives that can be area-specific.  

That's why I prefer to start with your goals and your numbers, and then look at the homes and opportunities that are actually available to you.

ot Sure If Now Is the Right Time?

You don't have to decide whether to buy a home before you start gathering information.

A Smart Start Buyer Call is an opportunity for us to talk about your goals, timing and what you're looking for in a West Valley home. From there, we can determine what information you need next—including when it's time to Speak to a Lender—so you can decide whether moving forward now makes sense for you.

Start with a Smart Start Buyer Call.