Why Rising Interest Rates Make Today a Great Time to Buy a Home
Editor’s Note (Updated June 2025): This article was originally published in 2022. It has been refreshed with updated market insights to help today’s buyers navigate rising interest rates and make informed decisions when purchasing a new home in Coastal Georgia.
Mortgage rates have been climbing over the past few years, leaving many potential buyers wondering whether they should pause their plans or move forward. The truth is that—even with recent increases—rates remain moderate compared to historical norms, and well-qualified buyers still have strong opportunities in today’s market.
Before hitting pause, it’s important to understand how rates affect affordability, home prices, and your long-term financial picture.
Why Waiting for Rates to Drop May Not Pay Off
The Federal Reserve has signaled that rate adjustments may continue in response to inflation. While no one can perfectly predict the market, waiting for dramatically lower rates could mean missing out on the right home, paying more if prices rise again, or competing with a surge of buyers once rates eventually fall.
Many buyers today choose to purchase the home they want now—and refinance later if rates improve. This strategy lets you lock in a home price today without gambling on market timing.
How Interest Rates Affect Home Prices
Interest rates impact how much you pay each month, but they also influence home prices across the market:
- When rates rise, buyer demand sometimes cools—and prices may stabilize or soften.
- When rates fall, demand typically surges, often pushing prices higher.
This means a slightly higher rate today can still be financially beneficial if the home price is lower than it might be in a more competitive, low-rate market.
Your Buying Power Changes as Rates Change
Even a small rate shift affects monthly payments. For example, a 0.5% increase can significantly change long-term interest costs. Understanding your buying power is essential—and a trusted lender can run updated scenarios to show what fits your goals.
Lending Standards May Tighten
As interest rates rise, lenders often increase their qualification standards. This may make loans harder to obtain later, even if home prices dip. Securing financing now may give you more flexibility and better loan options than waiting.
Partner With Our Preferred Lenders
If you're unsure how rising rates impact your buying journey, our Preferred Lenders can help by reviewing your credit, exploring loan options, and showing how a new home fits into your budget.
There are many advantages to buying now—especially when shopping for a new construction home from Ernest Homes. With high-efficiency features, modern layouts, and flexible financing options, your dream home may be closer than you think.
Ready to explore your options? Visit our available homes or contact our team to begin your homebuying journey today.
