Waiting for Lower Rates Could Cost Buyers

What's Happening Today

Markets are relatively quiet, but housing data tells a more important story. Stocks are moving higher while Mortgage Bonds are slightly lower, keeping rates rangebound. With limited economic data driving momentum, housing fundamentals and rate expectations remain front and center. The bigger takeaway today is not volatility, but opportunity.

Home Price Growth Looks Modest… But Dig Deeper

Case-Shiller shows year over year appreciation at 1.3% for 2025
Prior years: 10.6% in 2020, 19% in 2021, 5.8% in 2022 and 2023, 4.0% in 2024
Monthly declines occurred March through July when rates were elevated between 6.75% and 7.125%
Once rates began falling in late summer, prices started rising again
Past 4 months annualized appreciation: 4.6%
Past 3 months annualized appreciation: 5.3%
19 of 20 cities posted price gains in December

While the headline 1.3% year over year number looks soft, recent momentum shows home prices are accelerating again as rates improve.

Why Waiting Could Cost Buyers More

Higher rates earlier in the year cooled activity and prices temporarily
As rates declined, demand returned and appreciation resumed
Lower mortgage rates typically increase competition and push prices higher

If buyers wait for rates to drop further, they may face higher home prices and more competition. Buying during slower periods can mean capturing appreciation before demand ramps back up.

Mortgage Activity Reflects Rate Sensitivity

MBA reported mortgage rates around 6.07%, the lowest since September 2022
Rates are roughly 80 basis points lower than a year ago
Purchase applications are up 12% year over year
Refinance applications surged 150% year over year
Refinances made up 59% of total applications last week

Even modest improvements in rates are driving meaningful increases in activity, reinforcing how sensitive housing demand is to rate movements.

Markets Remain Rangebound

Mortgage Bonds continue to test resistance near 100.38
The 10-year Treasury is hovering near 4.05%
Yields have struggled to break below 4% this week
Limited economic data is keeping markets in a narrow range

Absent a major economic surprise, rates may continue trading sideways in the near term.

Final Takeaway

The housing market is quietly regaining momentum. While year over year appreciation appears modest, recent monthly gains show prices accelerating as rates ease. If mortgage rates continue to improve, demand will likely increase, putting upward pressure on home values.

For buyers waiting on lower rates, the bigger risk may be rising prices. If you want to evaluate the true cost of waiting versus buying now, let’s run the numbers together.