Everyone knows not to try to time the market when it comes to investing in the stock market, but that should also apply to home buying, experts said.
Rates holding just below 6.50% for a 30-year fixed mortgage may still seem high to many potential home buyers, but experts said that shouldn’t decide whether to buy a house or not. That’s down from a year ago and much below what our parents probably paid. The average rate since 1971 is just under 8%, according to Freddie Mac.
Maybe rates could edge a little lower this year but if you find the perfect home that you can afford now, housing experts say go for it.
“The key is not to wait for the perfect rate,” said Jeff DerGurahian, chief investment officer and head economist at non-bank retail mortgage lender loanDepot. “For homebuyers, the message remains simple: focus less on waiting for the perfect rate and more on finding a home that fits your budget and long-term plans.”
Isn’t the Mortgage Rate Important When Buying a Home?
The mortgage rate is important in calculating what monthly payments will be and the total cost of the house over time, but experts point out that’s only one of many factors.
“Many buyers are still hoping for lower rates, but it’s important to remember that rates are only one part of the affordability equation,” said Bob Johnson, residential mortgage lender and loan servicer Newrez’s head of originations. “If rates decline meaningfully, increased demand could put upward pressure on prices in some markets.”
Additionally, the publicized rate is the average. Potential buyers with good credit can get lower rates and better terms, experts said.
Lenders use credit scores as one measure to decide whether to approve a loan and on what terms, including interest rate. A high credit score tells lenders you’re at a lower risk of defaulting on a mortgage. Most conventional mortgages require homebuyers have a minimum credit score of 620 for approval, but certain first-time homebuyers may qualify for special government-sponsored loans with more lenient approval requirements, according to Equifax.
How Can Americans Improve Credit Scores to Get the Best Rate?
The first step is to know your credit score. A quarter of Americans don’t know their FICO score, a survey by credit scoring agency FICO showed.
Once you know your credit score, make a plan to improve it. Often, renters don’t even realize that just paying rent on time can help your score, FICO said.
“The path to homeownership starts with understanding your financial readiness,” said Jenelle Dito, vice president of consumer empowerment and partnership at FICO. “It’s best to begin monitoring your score at least six months before starting the process, giving you time to make meaningful financial improvements. Actively tracking your financial habits ‒ and identifying where there’s room to improve ‒ is an effective way to build your credit and secure better terms with a lender.”
Once you’ve built up your credit score, shop around for the best rate. Multiple mortgage-related credit inquiries within a short window (typically 45 days) are treated as a single inquiry when calculating your score, experts said.
“Shopping around has little to no negative impact ‒ and even a small difference in interest rates can translate into tens of thousands of dollars over the life of a loan, making it well worth the effort,” Dito said.
Aren’t Home Prices Still Rising?
Home prices are still rising, which can add to affordability issues, but they’re appreciating at a slower pace, experts said.
“While home purchase prices have generally trended higher in recent years, the pace of appreciation appears to be moderating,” Johnson said.
The median purchase price for first-time buyers increased about 6% from 2024 to 2025, compared with an increase of roughly 11% from 2023 to 2024, according to Newrez’s June survey. Repeat homebuyers’ annual purchase price growth halved, slowing to 5% from about 10%.
“While affordability remains challenging, the market is showing signs of becoming more predictable,” Johnson said. “Buyers may have more opportunity today to evaluate their options and make thoughtful decisions than they did during periods of rapid price growth.”
Buyers should also remember that if rates do fall, they can always refinance.
“If you find a home that works for your budget today, it can still make sense to move forward with a purchase, especially knowing that mortgage rates may eventually move lower, creating an opportunity to refinance into a lower payment later,” DerGurahian said. “Think of it less like trying to time the market perfectly and more like making sure the house, the payment and your long-term plan all fit together. While every market is different, housing remains one of the great long-term assets you can own.”
Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
Reporting by Medora Lee, USA TODAY Network via Reuters Connect
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