Waiting for mortgage rates to fall sounds logical: a lower rate can mean a lower monthly payment. The problem is that you are not the only buyer waiting. If rates decline enough to improve affordability, more buyers may return to the market at the same time.
Mortgage rates are near 7% again
Freddie Mac's September 24, 2026 survey put the average 30-year fixed mortgage rate at 7.03%. That is higher than the 6.30% average reported a year earlier. For buyers, the rate matters because it directly affects the payment associated with a given loan amount.
Why high-rate markets can create opportunities for buyers
When financing becomes more expensive, some buyers reduce their budgets or stop shopping. Sellers who still need to move may then have fewer offers to choose from. Depending on the home, that can create opportunities to negotiate the purchase price, request credits, keep inspection protections or avoid the aggressive bidding strategies common in hotter markets.
What happens if rates fall?
Lower mortgage rates can improve purchasing power, but they can also increase demand. More qualified buyers may re-enter the market, particularly in desirable San Diego neighborhoods where inventory is limited. That does not guarantee home prices will jump, but it is one reason waiting for a lower rate is not automatically the cheaper strategy.
“Buy now and refinance later” needs a disclaimer
You may hear the phrase “marry the house, date the rate.” It is catchy, but it leaves out an important fact: a future refinance is never guaranteed. Rates may not fall, the property value could change, your financial situation could change, and refinancing generally involves qualification and costs.
A better approach is to buy only if the payment and cash requirement make sense at today's terms. If refinancing becomes attractive later, treat that as a potential future benefit rather than something the purchase depends on.
Could you negotiate a rate buydown instead?
In some transactions, seller credits can be used toward eligible closing costs or a mortgage-rate buydown, subject to loan-program and lender rules. A temporary buydown lowers the payment for an initial period; a permanent buydown generally uses points to reduce the note rate for the life of the loan. The cost and break-even point should be compared with other uses of the same money.
What about San Diego home prices?
Current local data is mixed rather than a simple “prices are falling” story. Realtor.com reported an August 2026 median listing price of $899,000, down 5.4% year over year, while Redfin reported a roughly $999,000 median sale price over the three months ending August, up 5.2% year over year. Meanwhile, Realtor.com reported active San Diego listings were down 4.9% year over year, showing that local inventory remains an important constraint.
When buying now may make sense
- You can comfortably afford the payment without assuming a future refinance.
- You expect to stay in the home long enough for the transaction costs to make sense.
- You find a property that fits your needs and can negotiate acceptable terms.
- You have adequate cash reserves after closing.
- Your loan options have been compared rather than choosing based on rate alone.
When waiting may make more sense
If the payment would strain your budget, your income or location may change soon, your cash reserves would be depleted, or you are relying on an uncertain future rate drop to make the home affordable, waiting can be the more prudent choice.
Run the numbers instead of trying to call the market
A useful mortgage comparison can model more than one purchase price, down payment and rate scenario. For buyers deciding how to finance a purchase, see our San Diego mortgage options guide. Buyers considering an FHA loan can also compare it with conventional financing in our FHA vs. conventional San Diego guide.
If you are deciding whether to delay a purchase, see our Should I Wait Until 2027 to Buy a House in San Diego? guide for a side-by-side framework.
Sources: Freddie Mac Primary Mortgage Market Survey, September 24, 2026; Redfin San Diego housing-market data for the three months ending August 2026; Realtor.com San Diego market data for August 2026.
Frequently asked questions
Is it better to buy a house when mortgage rates are high?
It depends on the buyer and the property. Higher rates can reduce competition and create negotiating opportunities, but the payment still needs to fit your budget at today's terms.
Should I wait for mortgage rates to drop before buying?
Waiting may lower financing costs if rates fall, but future rates are uncertain and lower rates can bring more buyers into the market. Compare what you can afford now rather than relying on a forecast.
Can I refinance if mortgage rates go down later?
Potentially, but refinancing is not guaranteed. It depends on future rates, qualification, equity, property value, costs and lender guidelines at that time.
This article is for general educational purposes only and is not a commitment to lend, financial advice, or a prediction of future home prices or mortgage rates. Real estate conditions vary by neighborhood and property, and mortgage rates, programs, guidelines and eligibility can change.