I’m Michael DiVita — DRE #01372066 | NMLS #241655, DiVita Home Finance (DRE #01818285 | NMLS #323700), Tiburon, CA. I’ve been in California mortgage lending since 2000 and founded DiVita Home Finance in 2007. This is the question I get more than any other: should I buy now or wait? Here’s the same analysis I give every client — with the actual numbers. Call (800) 239-1103.
The question I hear more than any other right now: “Should I buy now or wait for rates to drop?” My honest answer — and I give the same answer whether the client is in Tiburon, Palm Springs, or Sacramento — is that waiting for the perfect market is usually how people miss the market entirely.
Here’s where things stand in August 2026, and how I think through this with clients who are on the fence.
Where Rates Are Right Now
The 30-year fixed rate averaged 6.66% as of August 27, 2026 (Freddie Mac). That’s down meaningfully from the 7.75%–8.00% peak we saw in late 2023. Buyers who purchased at peak rates paid a real penalty. The good news is that most of those buyers can now refinance — and many are calling me to do exactly that.
If you bought at 7.75% on a $900,000 loan, you’re paying about $6,295/month. At today’s 6.66%, that payment drops to $5,791/month. That’s $504/month back in your pocket, and a 20-month break-even if refinance costs run around $10,000.
For buyers sitting on the sidelines waiting for 5%: the Fed’s current posture, with Warsh signaling a hawkish stance and a possible rate hike later this year, makes sub-6% rates unlikely in the near term. 6.66% is the market right now, and it’s not a bad one.
The “Wait for Rates to Drop” Problem
Here’s what actually happens when rates drop significantly in California: prices go up. Fast.
When rates fell from 5% to 3% in 2020, California home prices went up 20–30% in 18 months. Buyers who waited for affordability during that drop ended up paying far more for the same house than if they’d bought before the rate drop. The math works against you.
The statewide median home price in California is $904,640 as of June 2026. If rates drop to 5.5% next year and prices respond the way they have historically — rising 10–15% — that same home costs $1,000,000–$1,040,000. Your monthly payment at 5.5% on $1,040,000 is $5,906/month. Versus today’s payment at 6.66% on $904,640: $5,821/month. You waited, paid more, and your monthly payment barely changed.
What Buying Now Actually Looks Like
Monthly cost of ownership is real. Only about 18% of California households can afford the median-priced home right now. If you’re in that 18%, you have buying power that most people don’t. That’s not a reason to overpay — it’s a reason to move intelligently.
A lot of my Marin County clients right now are dual-income professionals who’ve been renting in San Rafael or Corte Madera, paying $4,500–$5,500/month in rent. On a $1.2M home with 20% down at 6.66%, they’re looking at $6,189/month. The gap is real. But so is the equity they’re building — and so is the tax deduction on $64,000+ in annual mortgage interest.
The rent-vs-buy break-even in the Bay Area is 5–7 years. If you’re planning to stay that long, buying makes mathematical sense. If you’re not sure you’ll be here in 5 years, rent. It’s that simple.
When Waiting Actually Makes Sense
There are situations where waiting is the right call. If your credit score is below 700, spending 6–12 months getting it above 740 can save you 0.25–0.50% on your rate — which on a $900,000 loan is $135–$270/month. That’s real money, and the improvement often takes less time than people expect.
If you’re self-employed and your 2025 taxes haven’t been filed yet, filing first can significantly improve your qualifying income picture — especially with non-QM bank statement programs that use 24 months of deposits. Don’t rush into a higher rate because you applied before your documentation was ready.
And if you genuinely don’t have the down payment yet — not enough in the bank, not enough reserves — wait. A stretched buyer in a volatile California market is a stressed buyer. Get to a solid 10–20% down plus 2–3 months reserves before you start serious shopping.
What About the “Buy Now, Refinance Later” Strategy?
This is real and it works — but only if your loan is structured right from the start. I tell clients who are buying now at 6.66%: make sure you have no prepayment penalty, keep your closing costs reasonable (don’t pay excessive points), and be ready to refinance when rates hit your target. The refinance call is fast when rates move. I can usually turn those around in 3–4 weeks for my existing clients.
If you’re buying at 6.66% today and rates drop to 5.75% in 18 months, you refinance. Your break-even on $10,000 in closing costs at $700/month in savings is 14 months. You’ve improved your financial picture substantially, and you captured the equity appreciation in the meantime.
The Bottom Line
Stop waiting for the perfect rate. The perfect rate either doesn’t come, or comes with much higher prices attached. The best time to buy is when you’re financially ready: solid credit, solid down payment, stable income, and a plan to stay for at least 5 years.
If that’s you right now, it’s a good time to buy. If it’s not you right now, work on the piece that’s missing. That’s the honest answer — and it’s the same one I’d give my own family.
Call me at (800) 239-1103 or apply online. Tell me where you are and what’s holding you back. Most of the time, the answer is clearer than people think.
Frequently Asked Questions — Buying Now vs. Waiting in California
Is it better to buy a house in California now or wait in 2026?
For most buyers who are financially ready — solid credit, adequate down payment, stable income, and plans to stay 5+ years — buying now in 2026 outperforms waiting in California’s supply-constrained markets. Waiting bets on prices staying flat while rates fall, a combination that hasn’t occurred in the Bay Area or coastal Southern California in decades. The “buy now, refinance later” strategy captures today’s price and tomorrow’s rate when the time comes.
How much do California home prices typically appreciate per year?
California home prices have historically appreciated 4–7% annually statewide, with premium markets like Marin County, San Francisco, and coastal Southern California often averaging 5–8% in non-recessionary years. This appreciation significantly affects the math on waiting: a $1.1M home appreciating at 5% annually is worth $1,155,000 in 12 months — meaning a buyer who waited paid $55,000 more for the same house. At 8% appreciation, the cost of waiting rises to $88,000.
At what point is it financially better to rent than buy in California?
Renting beats buying when you plan to stay fewer than 3–4 years, when your housing cost ratio would exceed 45% of gross income, or when you’d need to deplete all liquid reserves to close. For buyers planning to stay 5+ years in a California market with normal appreciation, ownership almost always wins over renting economically — primarily because of equity accumulation and California’s property tax caps under Prop 13.
Will California home prices drop in 2026 or 2027?
As of September 2026, most California markets show flat to modest appreciation rather than price declines. A significant price correction would require either a sharp recession-level job loss event or a sustained surge in housing supply — neither of which appears imminent in the Bay Area or coastal Southern California. Inland California and some Central Valley markets have shown more price sensitivity to rate changes and may see modest declines in specific submarkets.
What is the minimum down payment to buy a home in Marin County?
For homes priced below the 2026 conforming loan limit of $1,249,125, conventional loans allow as little as 3–5% down. For Marin’s typical price range of $1.3M–$2.5M+, you’re in jumbo territory where most lenders require 10% minimum, with 20% preferred. At $1.5M with 10% down ($150,000), expect total cash needed including closing costs and reserve requirements to reach $220,000–$250,000. At 20% down, total cash needed rises to $370,000–$415,000.
Talk to Michael Directly
DiVita Home Finance | Tiburon, CA | In lending since 2000, founded DiVita Home Finance in 2007. Michael DiVita DRE #01372066 | NMLS #241655. Company DRE #01818285 | NMLS #323700.
💬 Text: (310) 849-9124
