Should you Wait For Rates To Drop Before You Buy?

Mortgage rates just hit 7.40% - the highest we've seen since November 2023.

So should you hit pause on buying until they come back down?

The short answer: not necessarily!

Here's what's happening behind the scenes in the Twin Cities right now. We have the most homes for sale in seven years, and pending sales have been running about 15% below last year. Homes are also sitting longer, an average of 48 days before going under contract. This means fewer buyers are competing for more homes, and sellers are a lot more willing to negotiate.

Now picture what happens when rates do drop.

All of the buyers who have been waiting on the sidelines jump back in at the same time. More buyers means more competition, multiple offers are back on the table, and prices start climbing again. That lower rate can end up costing you in other ways.

There's a saying in real estate: marry the house, date the rate.

Your purchase price is locked in for good. Your interest rate doesn't have to be. If rates come down after you buy, refinancing may let you lower your monthly payment later on. (Refinancing does come with closing costs, so it's worth running the numbers with your lender first.)

What does that look like as a buyer? Snagging a home now with less competition and more negotiating power, while keeping the option to grab a better rate down the road.

Waiting isn't wrong for everyone - it really comes down to your budget and your timeline. But "waiting for rates to drop" shouldn't be the only reason you sit this season out.

Thinking about whether now is your time to buy? Let's chat!

Data sources: Freddie Mac Primary Mortgage Market Survey (October 15, 2026); Minneapolis Area REALTORS® / NorthstarMLS (September 2026 and week ending September 26, 2026).