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Thinking about waiting for mortgage rates to drop before buying a home? Here’s why that strategy could cost you more in 2025—and how builder incentives like Cambridge Homes’ 2/1 buydown can make buying now smarter.
Many buyers are hitting pause, hoping mortgage rates will fall before making their move. It makes sense on paper—if the Federal Reserve is cutting rates, shouldn’t mortgages follow?
The problem is, they don’t. Mortgage rates don’t move in lockstep with Fed cuts, and waiting for the “perfect” rate can actually mean missing your window to buy.
The Federal Reserve recently cut its benchmark rate by 0.25%, yet 30-year mortgage rates rose soon after.
This happens because mortgage rates follow the 10-year U.S. Treasury yield, not the Fed Funds rate. When inflation sticks around or the government borrows heavily, long-term yields rise—and mortgage rates go right up with them.
So even when the Fed cuts rates, long-term loans like mortgages can move the opposite direction.
Let’s break it down.
If you wait for rates to fall by 0.25% on a $400,000 home loan, you might save about $63 per month.
Meanwhile, home prices could rise, inventory could shrink, and competition could heat up again. By the time rates drop slightly, you could end up paying more for the same home—or lose the one you wanted altogether.
And because rate dips are often short-lived, timing the market is nearly impossible.
The current housing market is steady but cautious. Even with multiple Fed cuts over the past two years, rates have hovered between 6% and 7%.
Whenever rates dipped, they bounced back as soon as new inflation or debt data hit. The result? Buyer confidence remains soft—Fannie Mae’s Home Purchase Sentiment Index fell to 71.4 in August, showing many buyers are still unsure.
But that hesitation hasn’t made homes cheaper—it’s just delayed decisions while prices stay firm.
If you’re financially ready and you find a home that fits your needs, now is still a good time to buy.
Why? Because today’s builders and lenders are offering incentives that weren’t available in previous markets—like rate buydowns, closing cost credits, and price locks—that can dramatically improve affordability.
At Cambridge Homes, we understand how intimidating this market can feel. That’s why we’re helping buyers take control of their payments with a 2/1 buydown program available on select homes.
Here’s how it works:
That’s the benefit of buying a new construction home—you can secure financing incentives that bring peace of mind right now, not someday.
Yes—if you find a home that fits your needs and budget. Rates may not drop significantly anytime soon, and home prices continue to rise in many markets. Acting now lets you lock in pricing and use builder incentives to reduce your effective rate.
Mortgage rates might fluctuate, but large, sustained drops are unlikely in the near term. Rates are tied to the 10-year Treasury yield and overall inflation expectations—not directly to Federal Reserve decisions.
Waiting often costs more than it saves. Even a small drop in rates usually doesn’t offset the impact of rising home prices or lost opportunities. Plus, short-term dips tend to reverse quickly.
Inflation, government borrowing, and cautious Fed messaging are key factors. These create volatility in the bond market, which directly influences mortgage rates. Meanwhile, limited housing supply keeps prices steady.
Ask about builder or lender incentives like rate buydowns. Cambridge Homes’ 2/1 buydown lowers your payment the first two years and locks in long-term stability—helping you beat the market without waiting for a headline shift.
If you’re asking, “Is now a good time to buy a house?”—remember this:
You can’t control the market, but you can control your timing.
Rates may not fall dramatically soon, but the right financing program can make buying today smarter than waiting for a drop that may never come.
Published October 2025
Adapted from insights by Anthony Grasst, National Builder Manager at CMG Home Loans (NMLS #273165)
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