Waiting for Interest Rates to Fall? You May Be Waiting for the Wrong Thing.

Every few months, I find myself coming back to the same conversation about buying a home.

And there is a reason.

I genuinely believe that if you want to own a home, you can comfortably afford the payment, and you expect to stay in that home for a reasonable amount of time, there are some very good reasons to be looking at the market right now.

Yes, even with interest rates where they are.

Actually, in some ways, because of where interest rates are.

That may sound counterintuitive, so let me explain.

Yes, Mortgage Rates Have Gone Up

Let’s start with the part nobody wants to hear.

As of August 6, the average 30-year fixed mortgage rate was 6.69%, according to Freddie Mac. That’s up from 6.55% just a few weeks earlier. (⁠Freddie Mac)

That’s real money. I don’t minimize it when I’m talking with buyers.

Affordability matters tremendously, and no one should purchase a home based on the assumption that interest rates are definitely going to come down or that they can simply refinance later.

We don’t know that.

What we do know is what the market looks like today.

And that’s where things become interesting.

So, is now a good time to buy a home in Sacramento?

For buyers who can comfortably afford the payment and plan to stay in their home for several years, today’s Sacramento market can offer real opportunities. Higher mortgage rates have reduced some buyer competition, while price reductions and seller negotiations can create advantages that may become harder to find if rates decline and more buyers return to the market.

Sacramento Is Sending Us Two Different Signals

If you only read the headlines, you might assume buyers have disappeared.

They haven’t.

According to the Sacramento Association of REALTORS®, June closed sales were 13.4% higher than a year earlier, while properties going under contract were up 17.9% year over year.

The median sold price reached $575,000, 4.2% higher than June 2025.

And Sacramento had just 2.1 months of housing inventory. (⁠Sacramento Association of REALTORS®)

Those are not the numbers of a housing market in freefall.

At the same time, something else is happening.

Some homes are sitting.

Some sellers are reducing their prices.

And some sellers who might have expected multiple offers a few years ago are finding themselves willing to negotiate.

Earlier this summer, nearly one out of every five Sacramento listings had experienced a price reduction. Nationally, 20% of active listings had a price reduction in July, with that number approaching 22% across the West. (⁠Realtor)

That’s why I would describe this market as selective rather than simply hot or cold.

The best homes—well located, well presented and correctly priced—can still sell very quickly.

Others create opportunity.

And for a smart buyer, that’s an important distinction.

The Question Isn’t Just “What Is My Interest Rate?”

For the last several years, we’ve become obsessed with mortgage rates.

I understand why.

But when you’re buying real estate, your interest rate isn’t the only number being negotiated.

There’s the purchase price.

There are closing costs.

There may be repair credits.

There may be seller concessions.

There may be opportunities to have a seller contribute toward eligible costs or, depending on the financing and circumstances, toward reducing the buyer’s interest rate.

And there is something else that’s harder to put into a spreadsheet:

competition.

A buyer today may be looking at a house that has been on the market for three weeks and asking:

“What can we negotiate?”

A buyer in a significantly lower-rate environment may be looking at that same type of house and asking:

“How much over asking do we have to offer to beat the other four buyers?”

Those are very different conversations.

What Happens If Rates Fall?

Nobody knows exactly where mortgage rates are headed.

That’s worth repeating.

Nobody knows.

But imagine for a moment that rates did drop meaningfully.

Some of the buyers who have been sitting on the sidelines because of financing costs would presumably come back into the market.

And what would they be competing for?

In Sacramento, we currently have only about 2.1 months of inventory, well below what would traditionally be considered a balanced market. (⁠Sacramento Association of REALTORS®)

That’s the part of the “I’ll wait for rates to come down” strategy that I think deserves more discussion.

You might get the lower rate.

But you might also get more competition.

You might lose some ability to negotiate.

And you might be buying into a market where prices have responded to increased demand.

There is no guarantee that a future buyer gets today’s house at today’s price with tomorrow’s interest rate.

That combination may never exist.

A Higher Rate Can Sometimes Come With a Better Transaction

Consider a buyer purchasing a $550,000 home with 20% down.

At a 6.69% interest rate, the principal and interest payment on a $440,000 loan would be approximately $2,836 per month, before taxes, insurance and other applicable costs.

At 6%, that principal and interest payment would be approximately $2,638.

That’s roughly a $200 monthly difference.

Significant? Absolutely.

But now let’s broaden the conversation.

What if today’s buyer is able to negotiate a lower purchase price?

What if the seller contributes toward allowable closing costs or financing expenses?

What if that buyer gets the home they really want without having to dramatically outbid other buyers?

And what if home values continue appreciating over the years they own it?

Suddenly the decision becomes more complicated than comparing 6.69% to some hypothetical future interest rate.

And that’s exactly how I think buyers should approach this market.

Sellers Need to Pay Attention Too

There is another side to all of this.

If you’re thinking about selling your home, the Sacramento market remains surprisingly resilient.

June’s median sales price was up from a year ago, closed sales increased significantly, and sellers overall received about 99% of their original asking prices. (⁠Sacramento Association of REALTORS®)

But that does not mean you can put any price you want on your home.

Today’s buyers are educated.

They’re payment-conscious.

They have access to enormous amounts of information.

And when they perceive a home as overpriced, they are increasingly willing to skip it.

That’s why we’re seeing price reductions even while overall Sacramento inventory remains relatively tight.

The lesson for sellers isn’t “the market is bad.”

The lesson is:

You have to get the price, presentation and marketing right from the beginning.

There is demand.

But buyers are becoming much less forgiving.

This May Be One of the More Interesting Buyer Markets We’ve Seen in Years

I wouldn’t call Sacramento a buyer’s market.

The numbers don’t support that yet.

But I would call this a market where buyers have opportunities they haven’t always had.

You can sometimes take time to think.

You can look at homes that have accumulated days on market.

You can identify sellers who have already adjusted their expectations.

You may be able to negotiate terms instead of simply asking, “How high do we have to go?”

And all of that has value.

California remains an extraordinarily expensive place to buy a home. Housing affordability is still a serious issue, even though C.A.R. reported some improvement earlier this year. (⁠California Association of Realtors)

So this isn’t an argument that everyone should rush out and buy a house.

It’s something much simpler.

Don’t let the interest rate make the entire decision for you.

If you can’t comfortably afford the payment, we wait.

If your life may change dramatically in the next year or two, we talk about that.

If buying would leave you without adequate reserves, we talk about that too.

But if you have stable income, sufficient savings, plan to stay put and have been waiting because you’re hoping someone will ring a bell and announce the “perfect” time to buy?

I don’t think that bell is coming.

Real estate rarely gives us perfect conditions.

It gives us different kinds of opportunities.

Right now, the opportunity may be that higher borrowing costs have taken some buyers out of the competition while creating more motivated sellers—and yet Sacramento’s underlying housing demand and limited supply remain surprisingly strong.

That is a market worth looking at.

Not fearfully.

Not recklessly.

Strategically.

And if you’ve been wondering what buying in today’s market would actually look like—not theoretically, but with your income, your down payment, your payment comfort level and the neighborhoods you’re considering—let’s have that conversation.

Sometimes the smartest first step isn’t deciding to buy.

It’s simply finding out what your options really are.

Don Stocker

Don@StockerandWatts.com

916-203-2882

Real Estate Reinvented