Should I Wait for Lower Mortgage Rates?

Mortgage rates ended September at their highest level since November 2023. That pushed the typical monthly mortgage payment up 6.7% from a year earlier in September, even though home values rose just 1%.

Plenty of people are holding off, with 41% of renters saying they'd be very or extremely likely to buy if rates fell, according to Zillow's 2026 Consumer Housing Trends Report.

"When you go to the grocery store or fill up your car, more of your paycheck goes to those costs than it used to," says Zillow Chief Economist Mischa Fisher. "Inflation also keeps mortgage rates high. When those conditions stack up, people don't take big financial risks. Many people still want to buy. They're waiting for conditions to turn in their favor."

Waiting for a better rate might mean waiting a long time. Zillow expects rates to ease only modestly, to 7.1% by the end of this year and 6.5% by the end of 2027. Let’s look at the pros and cons of waiting for buyers and sellers. 

Should buyers wait for lower mortgage rates or buy now?

What are the benefits of buying a home now?

• Competition has eased. Newly pending sales fell 8.5% from a year earlier in September.
• You may have more room to negotiate. In September, 27.4% of listings had a price cut, up from 26.2% a year earlier. Buyers had the edge in 38 of the 50 largest metros, according to Zillow's Market Heat Index.
• You have more homes to choose from. September inventory was 2.5% higher than a year earlier.

What are the benefits of waiting for lower rates?

• A lower rate would mean a lower monthly payment on the same home.
• In September, home values were lower than a year earlier in 17 of the 50 largest metros, so waiting could pay off in some areas. If prices keep slipping in those markets, waiting could mean buying the same home for less, and a smaller loan means a smaller monthly payment.
• Waiting could help buyers in other markets, too. Zillow expects home values to rise only about 1% this year and mortgage rates to ease through 2027. If your income keeps growing in that time, the same home could take up a smaller share of your paycheck.

What happens to competition when mortgage rates drop?

If rates fall, many buyers may return at once, and that competition could cancel out some of what you'd save. 

"It's not out of the question that rates will decline as rapidly as they rose, which would bring both buyers and sellers back to the market," says Fisher. 

How do I decide whether to buy now or wait?

Decide on answers to these questions:

• How long do you plan to stay? Nationally, buying a typical home comes out ahead of renting after about six years, though that varies widely by metro.
• What monthly payment can you handle comfortably today? Try BuyAbility to set your budget at today's rates, since there's no guarantee rates will drop enough for you to refinance later.
• Could you refinance later? If you can afford to buy current rates, you keep the option to refinance if they come down. Refinancing comes with fees and closing costs, so factor those in.

How can buyers prepare for lower rates?

• Decide in advance what rate or payment would make you act.
• Keep your pre-approval current and your financial documents ready, so you can move quickly when the right home appears.

Which Zillow tools help buyers decide when to buy?

• BuyAbility can help here too. It shows how rate changes affect what you can afford, using current rates. Once it's set up, listings within your budget are tagged as you browse.
• Saved searches and alerts help you see new listings right away.
• If you're renting now, the Rent vs. Buy Calculator compares the cost of renting with the cost of buying in your area.

Should sellers wait for lower mortgage rates?

What does it cost to give up a low mortgage rate?

Many homeowners locked in very low rates, and that has kept them in place. Your next mortgage would carry today's higher rate, so a similar loan would cost more each month. Even a small rate increase can shrink how much home you can afford at the same monthly payment.

How can home equity help you buy your next home?

Many owners have built up significant equity, which can go toward a bigger down payment on the next home and a smaller loan. A larger down payment limits the impact of higher mortgage rates. 

When does it make sense to sell now?

77% of sellers say a life event influenced their decision to move, according to the 2026 Consumer Housing Trends Report. The most common life event was a change in household or family size, followed by a new job. Timing matters, too: 36% of sellers say selling within their target timeframe is their top priority, second only to maximizing profit.

"Holding on to a low rate makes sense when nothing in your life is pushing you to move," says Fisher. "People are still having kids, changing jobs and outgrowing their homes. If that's you, the equity you've built up gives you a lot to work with."

If life is pushing you to move, the math on your rate is one factor among several. Equity can make it a smaller one. 

What is the housing market like for sellers right now?

Homes for sale in September were still 16.1% below pre-pandemic levels. Price cuts were more common than a year earlier, so pricing matters. If rates fall, more homeowners may list too, which would mean more competition for your buyers.

"Heading into next year, we expect more sellers and fewer buyers," says Fisher. "That means fewer chances to make the sale. The list price, the staging and getting your home in front of the most buyers will all matter more."

How should sellers prepare before listing?

• Compare your current monthly payment with what you'd likely pay on your next home.
• Consider your motivation for moving and your ideal timeline.
• When you interview agents, ask about pricing strategy, photos, floor plans, and virtual tours. Most sellers say floor plans (78%) and virtual tours (64%) are highly important in their listings, according to the 2026 Consumer Housing Trends Report.

Which Zillow tools help sellers plan their move?

• Claim your home to track its Zestimate on your owner dashboard.
• The Home Sale Proceeds Calculator estimates what you'd walk away with after selling costs.
• BuyAbility shows what you could afford on your next home at current rates.

So, should I wait for lower mortgage rates?

The right time to move depends on your budget, your timeline and your local market. Zillow's free local market data shows how prices and listings are trending where you live.