Interest Rates and Housing Prices: Why Waiting Can Cost More Than It Saves

The question we hear most

Should we wait for rates to come down?

It is a fair question. It is also an incomplete one. Your payment depends on two numbers, not one: the rate you borrow at, and the price you pay. Those two numbers push against each other. When rates rise, prices tend to soften. When rates fall, prices tend to climb, because more buyers can afford to compete for the same homes.

The National Association of REALTORS® puts it plainly in its consumer guide. Waiting for the perfect market is a gamble, because the moment when rates, prices, inventory, and the economy all line up at once may never come.

Waiting for the perfect housing market is a little like waiting for every traffic light to turn green before you leave the house.
— Gary Lanham, broker associate, quoted by the National Association of REALTORS®, September 2026

That does not mean buy at any price, today, no matter what. It means run both numbers before you decide. This article walks through the evidence, the honest cases for waiting, and then the local picture for Ada and Canyon counties.

First, the rate is not set the way you think

Many buyers wait for a Federal Reserve cut, expecting mortgage rates to follow. They often do not. The Federal Reserve Bank of Atlanta explained why in November 2025: the Fed does not set mortgage rates. For the past 20 years, mortgage rates have tracked the 10-year Treasury yield more closely than the Fed funds rate, because the average mortgage lasts about seven to ten years.

Here is what happened the last time the Fed cut. Between September 2024 and January 2025, the Fed cut its rate by roughly eight tenths of a point. Mortgage rates went up.

The Fed cut. Mortgage rates rose.

Sep 19, 20246.09%

Nov 21, 20246.84%

Mid-Jan 2025~7.04%

Source: Federal Reserve Bank of Atlanta, “Not Joined at the Hip: The Relationship between the Fed Funds Rate and Mortgage Rates,” November 10, 2025. The Fed cut about half a point in September 2024, and mortgages rose anyway. It happened again after the September 2025 cut, when rates moved from 6.26% to 6.34% in two weeks.

So a headline that says the Fed cut rates tells you very little about the rate a lender will quote you next week. That is one reason a local lender matters. More on that below.

Second, lower rates push prices up

The Federal Reserve Bank of Dallas studied this directly in April 2024. Their finding is the heart of this article.

Affordability depends on both the rate and the price. When policy gets easier, mortgage rates tend to fall, but house prices tend to rise because demand rises. The two effects work against each other. In the Dallas Fed simulation, a rate path one point lower than expected left affordability slightly worse than the baseline, because prices grew faster and ate the gain.

The size of the link is not small. Research cited by the Dallas Fed estimates that a one point rise in short-term rates lowers house prices by about 7.5% over two years. Run that in reverse and you see the risk of waiting: the rate relief you hope for can arrive attached to a higher price.

Supply makes it sharper. Realtor.com counted a national housing shortfall of 4.03 million homes in 2025, after more than a decade of underbuilding. When rates fall into a market that is already short of homes, the new buyers meet the same thin supply. Prices absorb much of the benefit.

That third number is the competition problem. You are not the only buyer waiting. If rates drop a full point, millions of households who are priced out today qualify tomorrow. December 2025 showed a preview: rates averaged 6.19% that month, down from about 7% at the start of 2025, and existing home sales jumped 5.1% to their strongest pace in nearly three years.

Prices, not rates, are doing most of the damage

Harvard’s Joint Center for Housing Studies made this point in October 2025, and it is worth sitting with. Rates fell half a point between May and October 2025, to 6.2%. Homebuying still sat at 30-year lows. The barrier was the price.

Home prices are up about 50% nationwide since 2020. The typical first-time buyer’s monthly loan payment more than doubled in that span, from about $1,200 to over $2,500. The income needed to carry it nearly doubled too. Harvard’s math is blunt: it would take rates near zero to bring the monthly payment back to its 2020 level, and even then higher taxes and insurance would keep total costs above 2020.

What changed since 2020 was mostly the price

Monthly loan payment, typical first-time buyer

2020 · $1,200  →  Mid-2025 · over $2,500

Income needed to afford it

2020 · under $70,000  →  2025 · over $130,000

Source: Harvard Joint Center for Housing Studies, “Lower Interest Rates Fail to Offset Effects of High Home Prices,” October 28, 2025. Loan example assumes 3.5% down. A 6.2% rate, Harvard notes, is not historically extreme. The average in 1990 was 10.1%.

Waiting does not fix a price problem if waiting is what pushes prices higher. That is the trap.

The cost of waiting, in plain numbers

Start with purchasing power. The same monthly budget buys a very different home at different rates.

Source: Ashley Harris, Neighbors Bank, quoted by the National Association of REALTORS®, September 2026. Principal and interest only.

Now the other direction. On a $350,000 loan, the payment at 6% is $2,098 a month. At 7% it is $2,329. That gap matters. But notice what it is not: it is not a reason to pay any price today, and it is not a promise that rates will fall on your schedule.

While you wait, three things usually keep moving. Prices, in most markets, keep creeping up. Rent keeps getting paid to someone else’s mortgage. And equity keeps building for the people who already own. NAR estimates the typical homeowner gained more than $214,000 in equity over the past ten years.

None of that makes waiting wrong. It makes waiting a cost, and a cost should be chosen on purpose, not by default.

Run your own numbers

Move the sliders. This is principal and interest only, on a 30-year fixed loan. Taxes, insurance, and HOA dues sit on top of this, and a lender will price your actual loan. Use this to see how price and rate trade against each other.

Try this test: lower the rate by half a point, then raise the price by 5%. Watch which one wins. In many cases the price increase takes back most of the rate gain. That is the Dallas Fed finding, in your own numbers.

The honest part: when waiting is the right call

We will not tell you waiting is always wrong. It is not. Wait, on purpose, if any of these are true for you.

• Your credit, down payment, or job picture is not ready. Fixing credit can lower the rate you are offered, which is worth more than timing the market. NAR and Bankrate both frame this as waiting with purpose: a target number or a target date that would change your mind.
• You may move again in under about five years. Buying costs money on both ends. A short stay rarely gives equity time to cover those costs.
• Your local market is actually falling, or inventory is climbing fast. That happens in some places while national prices rise. It is a local fact, not a national headline. Check it where you live, not where a headline was written.
• The payment only works if rates fall later. That is not a plan. That is a hope with a due date.

About “buy now, refinance later”

You will hear this line. Treat it with care. Bankrate reported in June 2026 that rates have stayed in the 6% to 8% range since September 2022, and that 56% of recent buyers were counting on lower rates to give their budgets room. Some are still waiting. One Idaho buyer in that reporting bought in September 2023 at 7%, expecting 5% within two years. It did not happen.

A refinance is not free and it is not guaranteed. In Bankrate’s example, refinancing a $400,000 loan from 7.25% to 6.25% saves $266 a month, but $8,000 in closing costs means 30 months just to break even. Our rule is simple: buy only if the payment works at today’s rate. If a refinance comes later, it is a bonus, not the plan.

Forecasts deserve the same caution. In October 2025, Fannie Mae expected rates to end 2026 at 5.9%. Later 2026 forecasts from Fannie Mae and the Mortgage Bankers Association put rates materially higher. Zillow, in December 2025, said rates were unlikely to fall below 6% in 2026 at all. Smart people disagree, and they revise. Do not build a family decision on any single forecast, ours included.

What this looks like here at home

National numbers set the scene. They do not price a home in Meridian, Nampa, Boise, or Caldwell. Bankrate makes the point with two North Carolina towns about 30 miles apart: in the same month, one was up 5.9% year over year and the other was down 18.2%. Same state. Same rates. Completely different markets.

So here is our market, from Intermountain MLS data.

Median price climbed through 2026 in both counties

Year over year in Q3 2026: Ada up 1.6%, Canyon up 4.4%. In October 2026: Ada up 3.5%, Canyon up 5.9%. Median single-family sale price, Intermountain MLS.

Sources: Intermountain MLS quarterly reports, single-family, Q1 to Q3 2026, and Boise Regional REALTORS® October 2026 Market Stat Sheet, IMLS data as of November 10, 2026. October figures reached us through published write-ups of that stat sheet.

Read that table the way a waiting buyer lived it. Someone who waited in Ada County in early 2026, hoping for relief, watched the median rise about $29,000 by fall. In Canyon County it rose about $20,000. Sales rose too: 7,711 homes sold in Ada County through Q3, up 14.1% year over year, and 4,099 in Canyon County, up 7.6%. Buyers did not sit out. They bought, and prices followed demand.

Supply is still tight, and resale is tighter

Months of supply, October 2026. Balanced: 4 to 6 months.

Ada resale1.7

Ada, all homes2.4

Canyon resale2.4

Canyon, all homes2.8

Canyon new build3.3

Ada new build3.7

Source: Boise Regional REALTORS® October 2026 Market Stat Sheet, IMLS data as of November 10, 2026. Note: Canyon County Regional REALTORS® (2CRR) monthly snapshots publish Canyon medians, sales, days on market, and listings, but not months of supply, so the Canyon supply figure above comes from the Boise Regional REALTORS® report.

Ada County had 1,948 homes for sale in October, down 8.3% year over year. Resale homes were the tightest slice: 892 listings and just 1.7 months of supply. Canyon County had 1,216 active listings, with 2.8 months of supply, up slightly from 2.6 in September. Both counties still lean toward sellers.

Quarterly detail, single-family, Intermountain MLS

Existing homes vs. new construction, Q3 2026: Ada existing median $564,825 (up 2.7%, 29 days), new construction $579,900 (up 0.9%, 65 days). Canyon existing $415,000 (up 3.8%, 33 days), new construction $469,990 (up 3.1%, 59 days). The quarterly reports do not publish months of supply or active listings, which is why the supply figures above come from the October monthly report.

One more local point, because it cuts against easy slogans in both directions. Ada prices were slightly down year over year in Q1 and Q2 before turning up in Q3. Local markets move in stretches, not straight lines. Anyone who tells you they know next quarter’s median is guessing. What we can do is show you the current numbers for your price range and your part of the valley, and update them as they change.

Why a local agent and a local lender, specifically

An online calculator gives you a national average with your numbers typed in. A preapproval gives you your numbers: your credit, your debts, your down payment, your actual rate options, and programs you may qualify for here. NAR’s guide makes the same distinction. A calculator is a starting point. A preapproval is the real picture.

Ask a local lender these three things:

• What is my payment at today’s rate, with taxes and insurance included, not just principal and interest?
• What would a seller-paid rate buydown or a temporary buydown do to my first two years of payments, and what does it cost?
• If I wait six months to improve my credit or down payment, how much would that change my rate and payment? Put a number on the wait.

Ask a local agent these three things:

• In my price range and my part of the valley, are prices rising, flat, or falling right now? Show me recent sales, not headlines.
• How long are homes sitting, and where are sellers giving ground on price, closing costs, or repairs?
• If rates drop half a point, what happens to competition for the homes I am watching?

Buyers who stay prepared while others sit out often gain leverage: more time to inspect, more room to negotiate, fewer bidding wars. That leverage is real right now in parts of this market, because sellers are more willing to negotiate than they were a few years ago. It does not last forever, and it is not the same on every street.

The bottom line

If your life says move, and the payment works at today’s rate, waiting for a rate that may arrive with a higher price and a crowd of new competitors is a risky trade. If your finances are not ready, or you will move again soon, waiting with a clear target is the smart move. Either way, decide with local numbers and your own numbers, not with a national headline.

We are here to take the stress of the transaction off your shoulders. You will always know where you stand, because we will be communicating with you every step of the way.

Want your numbers, not the national average? Call or email us and we will walk through your price range, your part of the Treasure Valley, and what a local lender would quote you today. One conversation, no pressure, and a clear picture before you decide anything.

Call (208) 614-3334 · Email Team Owens Realty

You can also start at teamowensrealty.com. We reply within 24 hours.

Sources

Every number in this article comes from one of the sources below. We have noted where a figure is a forecast rather than a result, because forecasts change.

The two starting points

• National Association of REALTORS®, “What to Do When Your Market Isn’t Quite a Buyer’s Market.” Published September 8, 2026, updated October 22, 2026.
• Federal Reserve Bank of Dallas, Richter and Zhou, “Lower interest rates don’t necessarily improve housing affordability.” April 2, 2024. Cited for the mechanism and magnitudes, not as a current forecast.

More recent research

• Federal Reserve Bank of Atlanta, “Not Joined at the Hip: The Relationship between the Fed Funds Rate and Mortgage Rates.” November 10, 2025.
• Harvard Joint Center for Housing Studies, “Lower Interest Rates Fail to Offset Effects of High Home Prices.” October 28, 2025.
• Harvard Joint Center for Housing Studies, “The State of the Nation’s Housing 2025.” June 2025. Prices up 60% since 2019; median existing single-family price $412,500 in 2024.
• National Association of REALTORS®, “Lower Mortgage Rates Help Push Home Sales to Nearly 3-Year High.” January 2026, reporting December 2025 sales.
• Realtor.com, “Housing Supply Gap Exceeds 4 Million Homes in 2025.” March 3, 2026.
• Freddie Mac, “Economic, Housing and Mortgage Market Outlook, January 2025.” January 24, 2025.
• FastExpert, “What Will Happen to Home Prices if Mortgage Rates Drop?” January 7, 2026.
• Bankrate, “‘Buy now, refinance later,’ they said. Mortgage rates said otherwise.” June 29, 2026.
• Bankrate, “Should I Buy a House Now or Wait?” Updated October 22, 2026.
• Zillow, “Zillow’s 2026 Housing Market Predictions.” December 2025. A forecast, presented as one.
• Fannie Mae, “Economic Developments, October 2025.” October 2025. A forecast vintage, cited to show how forecasts move.
• Redfin, “Redfin’s 2025 Predictions.” December 4, 2024. A forecast, not an outcome.
• Federal Reserve Board, Governor Barr, “A Long-Term View on the Costs of Shelter.” September 23, 2026. Atlanta Fed affordability monitor at 68 in July 2026, its lowest in 21 years.

Local data

• Intermountain MLS quarterly reports, single-family, Ada and Canyon counties, Q1 to Q3 2026.
• Boise Regional REALTORS®, October 2026 Market Stat Sheet, Intermountain MLS data as of November 10, 2026.
• Canyon County Regional REALTORS® (2CRR), monthly County Market Snapshots. Latest reviewed: September 2026. 2CRR does not publish months of supply.

A note on rates: mortgage rates move weekly, and figures quoted from the articles above reflect their publication dates. For a current rate, check Freddie Mac’s weekly Primary Mortgage Market Survey on the day you read this, and ask a local lender for a quote on your own file.

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