I’m Michael DiVita, DRE #01372066 | NMLS #241655, based in Tiburon. I’ve been originating mortgages in California since 2000, and I have had some version of this conversation thousands of times. The question sounds simple. The answer usually isn’t. Let me give you the real framework I use.
The Question Behind the Question
When a buyer asks me “should I wait for rates to drop,” they’re almost always asking something more specific: “will I regret this decision in two years?” That’s the real fear. Nobody wants to buy at 7.2% and watch their neighbor refinance at 5.5% eighteen months later.
That’s a legitimate concern. But it’s also solving for the wrong variable. Here’s what I mean.
What Happens When Rates Drop
Let’s say rates fall meaningfully — from 7%+ to the 5.5–6% range. That would be a significant improvement. On a $1.2M loan, that’s roughly $900–$1,100 less per month. Real money.
But here’s what also happens when rates fall in a supply-constrained market like Marin County: prices go up. Demand that was waiting on the sidelines comes back in fast. Multiple offers return. Sellers get more aggressive. The house that sat at $1.95M in October gets bid to $2.15M in February because suddenly 200 more buyers can qualify for it.
I watched exactly this pattern in the late 2010s. Rates dipped, inventory stayed tight, and the people who waited for “better rates” ended up paying more for the same house — or a worse house — than if they’d bought six months earlier at the slightly higher rate.
The math doesn’t always work out that way, and I’m not going to pretend the future is predictable. But the assumption that “wait for lower rates = better deal” ignores the price side of the equation entirely.
The Five Questions I Ask Every Buyer
Rather than trying to forecast where rates are going — which nobody can do reliably, including me — I walk clients through five questions. The answers usually make the decision clear.
1. Can you afford the payment at today’s rate without stretching dangerously? Not “can you technically qualify” — can you make this payment comfortably for 12–18 months even if something goes sideways? Job changes, car repair, a medical bill. If the answer is yes, rates become less of a factor.
2. How long are you planning to stay? If you’re buying a starter home for two years, the rate risk is real — you don’t have much time to refinance into a better environment, and you’re going to pay significant closing costs on both ends of a short hold. If you’re buying the house you plan to be in for 7–10 years, short-term rate volatility matters a lot less. Rates move in cycles. You’ll have the opportunity to refinance.
3. What’s your real alternative? Most buyers asking this question are renting. So the comparison isn’t “buy now vs. buy later at lower rates.” It’s “buy now vs. keep renting.” In Marin, rental costs are not cheap, and they’re not going down. Every month you rent, you’re paying someone else’s mortgage and building zero equity. That’s not inherently wrong — there are good reasons to rent — but it should be part of the calculation.
4. Is the house right? I’ve seen buyers talk themselves into the wrong house because rates were “low enough.” I’ve also seen buyers walk away from the right house because they were chasing a rate that may or may not materialize. If the house checks the boxes — location, size, school district, commute — that matters more than the rate environment. A great house at 7% beats a mediocre house at 5.5%.
5. What does your rate sensitivity actually look like? Not everyone is locked into a 30-year fixed. Depending on your hold period and risk tolerance, a 7/1 ARM or a 5/1 ARM might price meaningfully lower than the 30-year fixed and give you rate exposure you’re comfortable with. These products have gotten more attention recently for good reason. If you’re confident you’ll be refinancing or selling within 7 years, paying for the full 30-year fixed certainty may not make sense.
The “Date the Rate, Marry the House” Line — And Why I Half-Agree
You’ve probably seen this phrase floating around real estate circles. The idea is: buy the house you love, refinance later when rates improve. It’s not wrong, but it glosses over something important.
Refinancing costs money. Closing costs on a refinance in California are typically $4,000–$8,000 on a Marin-sized loan. You have to run the break-even math. If you save $500/month by refinancing, it takes 8–16 months to break even on those costs. That’s usually worth it — but it’s a real cost you should factor in, not something you just wave away.
The more honest version of the phrase is: buy the house you can afford at today’s rates, that you’d still be happy with if rates never drop significantly, and use refinancing as an upside scenario rather than a requirement.
What I’m Seeing in the Marin Market Right Now
Inventory is still limited. September typically sees a slight pickup in new listings as families settle after summer, but this year that’s been modest. The buyers I’m working with who have been pre-approved and are ready to move are in a better competitive position than they were in 2021–2022, but this is still not a buyer’s market by historical standards.
The buyers who are succeeding right now are the ones who are clear on what they want, have their financing dialed in before they start looking, and are willing to act when the right property appears. The ones who are struggling are the ones who need everything to be perfect — rates, price, inventory — all at the same time. That window may never come.
My Honest Answer
If you asked me point-blank: rates at 7%+ are genuinely high by recent historical standards. If you have a legitimate reason to wait — you need more time to save for a down payment, your household situation is in flux, you’re not sure where you want to live — then waiting makes sense and you should wait.
But if you’re financially ready, you’ve found a house that works for your family, and you’re only waiting because you’re hoping for lower rates — that’s a gamble, not a strategy. Rates might fall. They might not. The house might still be available when they do. It might not be. The price might be the same. It might not be.
The one variable you can actually control is the rate structure of your loan. Call me and we’ll talk through what product makes sense at today’s numbers, what your refinance trigger point looks like, and how to position yourself to move fast when you’re ready.
Michael DiVita — Mortgage Broker, Tiburon CA
DRE #01372066 | NMLS #241655
DiVita Home Finance, Inc. — DRE #01818285 | NMLS #323700
📞 (800) 239-1103 | Text: (310) 849-9124
