September 1, 2026
By Courtney Orlando, REALTOR® | Courtney Orlando Group | Compass Real Estate
One of the most common things I hear from New Jersey homebuyers is:
“We're going to wait until mortgage rates come down before we buy.”
On the surface, that sounds like a smart strategy.
A lower interest rate can mean a lower monthly payment and potentially greater purchasing power.
But there's another side to the equation that buyers shouldn't overlook:
What happens to home prices and competition when mortgage rates finally do come down?
If you've found the right home, you're financially prepared to purchase, and you can comfortably afford the payment at today's rate, waiting for lower rates could actually make buying more difficult—not easier.
My advice to buyers is simple:
Don't Wait for the Rate. Buy the Right House and “Rent the Rate.”
Your mortgage rate doesn't necessarily have to be permanent.
If you purchase a home today and mortgage rates decline enough in the future, you may have the opportunity to refinance into a lower rate and payment.
That's why I like to tell buyers to think of it this way:
“You own the house, but you're renting the rate. If the right house comes along and you can comfortably afford it today, don't automatically give it up because you're waiting for an interest rate that may or may not arrive. You may have the opportunity to refinance the rate later. You can't refinance the price you paid for the house.”
— Courtney Orlando, REALTOR®
Of course, refinancing isn't guaranteed.
Rates have to decline sufficiently, you have to qualify, and there can be costs associated with refinancing.
But that doesn't change the larger point:
Today's interest rate can potentially change. Your purchase price cannot.
What Could Happen When Mortgage Rates Drop?
This is the part of the conversation that I believe is especially important for New Jersey buyers.
There are buyers sitting on the sidelines right now for one primary reason:
Interest rates.
What happens when rates finally make a meaningful move lower?
Some of those buyers are likely to come back.
That could mean:
- More showings
- More offers
- More competition
- Less negotiating power
- Potentially higher home prices
In desirable New Jersey communities where inventory is already limited, it may not take a dramatic change in rates to increase buyer activity.
“Everyone waiting for rates to fall should remember that they're probably not the only buyer waiting. When rates come down, you may suddenly be competing against all the other people who had the exact same plan.”
— Courtney Orlando
That's why waiting for the “perfect” mortgage rate isn't necessarily the safest strategy.
A Lower Rate Doesn't Automatically Mean a Better Deal
Let's look at a simple example.
Suppose you're considering a $750,000 home with 20% down and a $600,000 mortgage.
At approximately 6.75%, principal and interest would be around $3,892 per month.
At 5.75%, the payment would be around $3,501 per month.
That's a savings of approximately $391 per month in principal and interest.
It's easy to look at those numbers and conclude:
“I'll just wait for 5.75%.”
But what if rates fall and that $750,000 house is no longer $750,000?
What if increased demand, appreciation and additional competition mean you're now looking at $775,000 or $800,000 homes?
Or what if the property receives multiple offers and you need to bid above asking price to get it?
The lower rate is only one piece of the equation.
The purchase price, competition and availability matter too.
You Can Potentially Refinance the Rate. You Can't Refinance the Purchase Price.
This is one of the most important concepts I discuss with buyers.
Imagine two buyers.
Buyer A Buys Now
They find the right home at a price they can afford and lock in today's mortgage rate.
If rates fall enough in the future, they explore refinancing.
Buyer B Waits
They hope mortgage rates will decline before purchasing.
Rates eventually fall—but now more buyers have entered the market.
The homes Buyer B likes cost more, sellers have greater leverage and multiple-offer situations become more common.
Who ultimately got the better deal?
It isn't automatically Buyer B simply because their mortgage rate is lower.
That's why buyers should consider the total cost of the opportunity, not simply the interest rate.
“Rent the Rate” Doesn't Mean Buy a House You Can't Afford
This is an important distinction.
I'm not suggesting anyone stretch their finances based on the assumption that they'll refinance later.
Never purchase a home today that you can only afford if rates fall tomorrow.
Instead, purchase a home when:
- You can comfortably afford the payment at today's rate.
- You have sufficient funds for the down payment, closing costs and reserves.
- The home meets your needs.
- You expect to remain in the home long enough for ownership to make financial sense.
- The purchase fits your overall financial situation.
Then, if rates eventually decline enough to make refinancing worthwhile, you can explore that opportunity.
Think of refinancing as a potential future benefit—not a requirement for making today's purchase work.
Trying to Time the Housing Market Is Extremely Difficult
I've been helping buyers and sellers navigate New Jersey real estate for more than two decades, and I've seen markets with high rates, low rates, rising prices, declining inventory and intense bidding wars.
One thing has remained consistent:
It's extraordinarily difficult to perfectly time both mortgage rates and home prices.
“Buyers often ask me when the perfect time to buy will be. The truth is, we usually don't recognize the perfect market until it's already behind us. If you're ready financially and the right house becomes available, I'd rather see you secure the house and deal with the interest rate later than lose the house while waiting for the perfect rate.”
— Courtney Orlando
There is no guarantee that rates will fall on the schedule buyers expect.
And even if they do, there is no guarantee that the home you want will still be available at the same price.
Waiting Has a Cost, Too
When people calculate whether they should buy now or later, they frequently compare mortgage payments.
But waiting has its own costs.
If you're renting, you're continuing to make rent payments while waiting.
You're also delaying the opportunity to build equity through mortgage principal reduction and any potential home appreciation.
And if home prices rise while you're waiting, your required down payment may rise along with them.
For example:
A 20% down payment on a $750,000 home is $150,000.
If that home eventually costs $800,000, 20% becomes $160,000.
You've waited for a better mortgage rate—but now you need another $10,000 just to maintain the same percentage down.
That's why the decision can't be based on the interest rate alone.
What About New Jersey Property Taxes?
New Jersey buyers also need to look beyond the mortgage rate.
Property taxes, homeowners insurance, HOA fees when applicable, maintenance expenses and commuting costs all contribute to the true monthly cost of owning a home.
That's why I encourage buyers to establish a comfortable total monthly housing budget rather than simply deciding what purchase price they can afford.
Once we know that number, we can structure the home search around it.
The goal isn't to find the most expensive home you can technically qualify for.
It's to find the right home that fits comfortably within your financial plan.
So, Should You Buy Now or Wait?
If you're not financially ready, waiting may absolutely be the right decision.
But if you're financially prepared and the only reason you're waiting is because you're hoping mortgage rates will fall, I would reconsider that strategy.
A better question may be:
“Can I comfortably afford the right house at today's payment?”
If the answer is yes, buying sooner may put you in a stronger position than waiting for the rest of the market to receive the same signal that rates have fallen.
And remember:
You don't necessarily have to keep today's mortgage rate forever.
If rates fall enough, refinancing may give you an opportunity to lower your payment later.
That's the idea behind “rent the rate.”
The Bottom Line for New Jersey Homebuyers
Don't become so focused on getting the perfect mortgage rate that you miss the right home.
If you're ready to buy, you can afford today's payment and you've found a property that makes sense, there can be a compelling argument for purchasing now rather than waiting for rates to fall.
Because when rates eventually decline, you may not be the only buyer who notices.
“The house is the part of the transaction you can't change later. The mortgage is the part you potentially can. Buy the right house at a payment you can afford today, and if the opportunity comes to refinance tomorrow, take advantage of it.”
— Courtney Orlando
Buy the house. Rent the rate. Refinance when the numbers make sense.
Thinking About Buying a Home in New Jersey?
Whether you're ready today or just beginning to explore your options, understanding your purchasing power is the best place to start.
The Courtney Orlando Group can help you evaluate available homes, current market conditions, comparable sales and the true cost of purchasing so you can make an informed decision without trying to perfectly time the market.
Courtney Orlando, REALTOR®
Courtney Orlando Group at Compass
Serving buyers and sellers throughout Central and Northern New Jersey and the Jersey Shore.
This article is for general informational purposes only and should not be considered mortgage, financial, tax or legal advice. Mortgage rates, lending requirements and market conditions can change. Refinancing is not guaranteed and may involve closing costs, qualification requirements and other expenses. Buyers should consult with a qualified mortgage professional regarding their individual circumstances.