Mortgage Rates Keeping You Sidelined?

^{Should You Wait for Mortgage Rates to Fall to Buy a House in Arkansas?}

No one knows for certain if, or when, mortgage loan rates will fall. On any given day, you can find financial experts predicting with confidence that rates will fall, rise, or stay the same. The truth is, no one can say for sure. For renters across Western Arkansas watching the market, this uncertainty can make homeownership feel out of reach. But focusing solely on interest rates might mean missing out on broader opportunities.

Home Prices Haven’t Waited, Why Should You?

Over the past few years, many renters assumed home prices would dip as mortgage rates rose. But that hasn’t been the case. In fact, national home prices continued to rise steadily in 2022, 2023, and 2024, and Western Arkansas has seen its own steady appreciation.

Even if mortgage rates ease, home prices are unlikely to return to pre-2020 levels. And if rates do drop, expect a fresh surge of demand that could drive prices even higher. In other words, the longer you wait, the more likely you’ll be paying more — either through interest or a higher purchase price.

Today's Rates in Historical Context

Real estate and mortgage lending professionals often look back at the historic lows of recent years with longing. However, when we take a step back and look at mortgage rates over the long term, today’s rates remain close to or even below the historical average.

Freddie Mac, the main industry source for mortgage rates, has been tracking data since 1971. From April 1971 to April 2024, the average rate for a 30-year fixed mortgage was 7.74%. Even with recent rate increases, today’s rates hover near or below this long-term average.

What Happens When Mortgage Rates Drop?

While it’s natural to want to wait for lower rates, it’s important to understand what typically happens when they do fall. Lower rates often pull more buyers into the market, including first-time buyers and those who’ve been waiting on the sidelines. This surge in demand, especially in a housing market with limited inventory, drives up home prices.

Increased competition can also lead to:

Bidding wars
Appraisal gaps
Fast-paced decisions
Additional out-of-pocket expenses

These dynamics can make an already stressful home-buying process even more challenging, especially for renters who are looking to make a thoughtful, budget-conscious transition to ownership.

Renting vs. Owning: Weighing the Long-Term Costs

If you’re currently renting and in a financial position to buy, it may be worth rethinking the wait. Every month you delay, you’re missing the opportunity to build equity in your own home, instead of contributing to your landlord’s.

“Every day spent waiting for rates to drop is a day you’re not building equity in your home,” says Tricia Depeel, Executive Vice President and Chief Operating Officer at First Western Mortgage. And while you can always refinance your home later if rates drop, that’s not guaranteed. Refinancing comes with its own closing costs, and market conditions, or personal financial shifts may impact your eligibility. It’s a potential bonus, but not a promise. Tricia also says “Homes tend to appreciate over the long term with fixed principal and interest payments, while rents tend to increase. If you can comfortably afford to do so, purchasing now may have a better return on your investment than waiting for rates to fall.”

Are You Financially Ready to Buy a Home Now?

Deciding to buy a home isn’t just about timing the market, it’s about aligning with your goals, values, and financial situation. It’s smart to do a full financial self-check before jumping into homeownership. Ask yourself:

Can you comfortably afford the monthly mortgage payment?
Do you have funds for a down payment and closing costs? (including low- and no-down-payment loans)
Do you know your local home values and property taxes?
Do you know your long-term financial goals?
Are you prepared for maintenance and emergency expenses?

A good rule of thumb is to have enough savings to cover at least three months of living expenses, and 1% of your home’s value annually for repairs. That way, you’re not stretched thin once you move in.

Not quite there yet? No problem. Building credit, paying down debt, or saving a larger down payment are all excellent reasons to keep renting temporarily until you’re ready to buy with confidence.

“The right time to buy is when you can comfortably afford to do so, and when your home purchase aligns with your goals and values,” Depeel adds.

Get Help from First Western Mortgage

Whether you're just starting to think about homeownership or you're ready to take the next step, our team is here to support you. At First Western Mortgage, we offer:

Competitive mortgage rates
Personalized lending options
Local market expertise
Friendly and responsive service

Let us help make your home buying journey simple and stress-free. Call us today at 479-845-0972 to speak with one of our mortgage lending professionals or apply now.

Related:

Equal Housing Lender. Tricia Depeel (NMLS #1309007)

Our Mortgage Lenders

	NMLS #
First Western Mortgage	498427
Clay Conly	653956
Jennie Hill	607984
Tricia Depeel	1309007
Lauren Carter	1672205
Linda Sloan	979749