What’s the Cost of Waiting to Buy a Home?


The FED finally paused their hikes on interest rates on Wednesday. 

While there is not a rise in the Federal Funds rate this time, it appears likely that there will be 2 more increases in 2023. 

The FED releases a dot plot where the members feel that the Federal Funds rate should be.

Currently, the Federal Funds rate sits at about 5.08% and most dots fell in the 5.6% range for 2023. 

This article by Mortgage News Daily does a good job explaining The Federal Funds rate and the current interest rate market:


After 2 huge reports – The CPI Inflation Report and the FED statement, interest rates have settled almost exactly where they were a week ago.

This is surprising to me as I thought we would get more rate improvement with inflation dropping to 4%. 

Below are current average interest rates across the country per Mortgage News Daily:

And below is Green Home Loans Rate Sheet.


After all the doom and gloom about the housing market, the housing market appreciated 5-6% in 2022 and is on track for the same in 2023. 

MBS Highway has a great tool called the Cost of Waiting.

Many consumers are waiting for interest rates to go down before they buy a home.

With the Cost of Waiting tool, we can compare buying now vs. buying in the future with a lower rate.

See example below of

  1. Purchasing a home with a 6.5% rate with today’s housing value
  2. Waiting 6 months and getting a 5.5% rate with a housing value that is 2.06% higher (4.12% conservative yearly appreciation)
  3. Waiting 12 months and getting a 5.5% rate with housing value that is 2.95% higher (2.95% conservative yearly appreciation)

By waiting 6 months, the buyer is losing $20,580 in home appreciation. 

After factoring in amortization, lower payments, and the cost to refinance down to a 5.5% – the consumer is losing $19,452 by waiting 6 months.

And losing $30,879 by waiting 12 months.

As long as homes continue to appreciate which they are expected to do, it will almost always make more financial sense to buy now and refi later if rates drop.