I hear this every week:

“Let’s wait until the rates go down.”

I understand. Who wants to pay a higher rate?

But here’s the real question:

Are you waiting for rates to go down?

Or are you waiting for the competition to increase and prices to rise?

Let’s examine this.

What Actually Controls Mortgage Rates?

Mortgage rates aren’t declining because the newspapers told us they will.

They’re actually controlled by the bond markets, the Federal Reserve, and the U.S. Treasury bond markets.

If inflation goes up, rates will be higher.
If inflation goes down, rates can go down.

But here’s the big point that most people miss:

Rates move in waves, not in a straight line.

And the markets react to what’s going to happen before it actually happens.

By the time you’re “confident” that rates have gone down, the window of opportunity will have passed.

What Happens When Rates Go Down?

Let’s look at what actually happens when rates go down.

2020–2021: The Low Rate Frenzy

When rates dropped to the 2–3% range during the COVID stimulus package, the demand for housing skyrocketed.

The Fed opened the stimulus faucet, and rates plummeted.

And what happened?

Homes had 20+ offers.
Buyers threw in the towel and gave up their contingencies.
Prices skyrocketed.
Appraisal gaps were the norm.
Investors flooded the markets.

Rates didn’t make housing cheaper. Rates made housing more expensive because of the demand.

More demand = prices go up.

The Math Most Buyers Miss

Let’s use a simple example.

Home price today: $800,000
Rate: 6.75%

What happens if rates drop to 5.5% next year?

What do most buyers think?

“Great! My payment will be lower!”

Maybe.

But what if prices increase 8 to 10 percent because of increased demand?

That $800,000 house just became $864,000 or more!

You’re now borrowing more money!

And competing again with 15 other buyers!

Lower rate. Higher price. Less leverage. More stress. More competition.

What Smart Buyers Do

They don’t try to outguess the market.
They:

Focus on purchase price negotiation
Use seller credits strategically
Structure temporary buydowns if helpful
Keep flexibility
Avoid emotional FOMO

They treat the purchase like a business decision. Because it is.

The Bottom Line

Waiting for rates to go down may be safe.

But you may be waiting to compete with more buyers at higher prices.

You can create opportunity right now if the numbers work.
And if rates do go down, you can refinance strategically.

And if rates don’t go down? Well, you locked in a property before the next surge.

That’s the way to think.