"Ken, we're going to wait until interest rates come down."
I hear that sentence almost every week, usually from good people who have done everything right. They have saved. They have paid attention. They have pictured the backyard, the school down the street, and the kitchen where the holidays will happen. Then they look at today's rates and their stomach drops.
That reaction makes sense. A home is the biggest purchase most families ever make, and nobody wants to feel like they bought at the wrong time.
After more than 28 years in this business, here is what I can tell you: there is no perfect market. There are only different opportunities in different conditions.
When rates are lower, buying power usually improves, and that often brings more buyers out. When rates are higher, some buyers step aside, and that can leave more room to negotiate. Neither one is guaranteed. What you can actually negotiate depends on the specific home, the specific seller, and the neighborhood.
Here is an idea worth holding onto:
You may be able to refinance your mortgage later, but you cannot go back in time and renegotiate yesterday's purchase price.
Let me be straight about the other half of that. Refinancing is never guaranteed. It depends on future rates, your income, your credit, and your home's value. And home prices can go down as well as up. So this is not a "buy now before it's too late" article. It is a "know your options before you decide" article.
Where does the Sacramento market stand right now?
Two numbers set the stage. Both are averages, not quotes and not forecasts.
- Mortgage rates. Freddie Mac's weekly survey put the national average 30-year fixed rate at 7.40% for the week of October 8, 2026. That was up from 7.28% the week before and 6.30% a year earlier. This is a national average across many borrowers. Your own rate depends on your credit, down payment, loan type, and the day you lock.
- Sacramento County prices. Redfin reports a median sale price of about $544,000 for the three months ending September 2026, up 2.9% from the same period a year earlier. Homes took a median of 31 days to sell, the same as last year, and 1,113 homes sold in September compared with 1,140 a year earlier.
One more number keeps us honest. Redfin's sale-to-list ratio for Sacramento County was 99.6% in September. On average, homes are still selling very close to asking price. So the opportunity today is not a countywide discount. It is home by home: the listing that has sat for 60 days, the seller who has already moved, the builder with inventory to close before year end.
A note on geography. These are Sacramento County figures. They are not the same as the City of Sacramento alone, and they do not describe Roseville, Rocklin, or Lincoln in Placer County, or El Dorado Hills in El Dorado County. A median price also is not the same thing as appreciation on any one house, because the mix of homes that sell changes from month to month. For a wider look at local conditions, see the Sacramento housing market in 2026.
What happens if you wait for mortgage rates to drop?
Waiting is a real strategy, and sometimes it is the right one. Here is how the pieces tend to move together.
- If rates fall, your payment on the same loan amount goes down. That is the upside of waiting.
- Lower rates can bring buyers back. More buyers can mean more competition and less room to ask for credits. In an area with limited supply, that can support prices. It does not happen automatically, and lower rates do not always push prices up.
- Prices could also soften. If rates stay high and demand stays quiet, prices in some neighborhoods could slip. A buyer who waited would benefit.
- Your own picture can improve. Another year of savings, a higher credit score, or a paid-off car loan can matter more than any rate move.
- Waiting has a cost too. A year of rent, and a year without paying down a loan balance.
Nobody knows which of these will happen, including me. Anyone who tells you where rates will be next year is guessing. For background on why rates moved, see what the Fed's September move means for buyers.
A real payment comparison: buy now, use a buydown, or wait
Hypothetical illustration for education only. Not a rate quote, not an offer of credit, and not a forecast. Payments are principal and interest only. They do not include property taxes, homeowners insurance, mortgage insurance, HOA dues, or maintenance, all of which add to the real monthly cost. With 10% down on a conventional loan, mortgage insurance would normally apply. The figures shown are not APRs.
Assumptions: $550,000 purchase price, 10% down ($55,000), $495,000 loan, 30-year fixed, 7.40% note rate (the October 8, 2026 national average, used only to show the math).
| Scenario | Payment based on | Monthly principal and interest | Compared with the full payment |
|---|---|---|---|
| A. Buy today, no buydown | 7.40% all years | $3,427 | none |
| B. 2-1 buydown, year 1 | 5.40% | $2,780 | $648 lower |
| B. 2-1 buydown, year 2 | 6.40% | $3,096 | $331 lower |
| B. 2-1 buydown, year 3 on | 7.40% | $3,427 | none |
| C. 3-2-1 buydown, year 1 | 4.40% | $2,479 | $949 lower |
| C. 3-2-1 buydown, year 2 | 5.40% | $2,780 | $648 lower |
| C. 3-2-1 buydown, year 3 | 6.40% | $3,096 | $331 lower |
| C. 3-2-1 buydown, year 4 on | 7.40% | $3,427 | none |
What the buydowns cost. A temporary buydown is not a free rate reduction. Someone pays for it up front, and the money sits in an account that covers the difference each month.
- 2-1 buydown: about $11,745 ($648 x 12, plus $331 x 12).
- 3-2-1 buydown: about $23,127.
In both cases the note rate stays 7.40% for the life of the loan. The buydown changes what you pay in the early years. It does not change the loan. And the payment relief is roughly equal to what was paid in, so think of it as breathing room, not as savings. A 3-2-1 buydown is not available on every loan program, and seller contribution limits can rule it out. For a deeper comparison, see 2-1 buydown vs permanent buydown.
What if you wait a year? Here are three ways it could go. Each is an illustration, not a prediction.
| If you wait one year and... | Price | 10% down | Loan | Monthly principal and interest | Compared with buying today at $3,427 |
|---|---|---|---|---|---|
| D. Prices rise 2.9% and rates fall to 6.00% | $565,950 | $56,595 | $509,355 | $3,054 | $373 lower per month, $15,950 higher price, $1,595 more down |
| E1. Prices stay flat and rates fall to 6.00% | $550,000 | $55,000 | $495,000 | $2,968 | $460 lower per month |
| E2. Prices fall 3% and rates stay at 7.40% | $533,500 | $53,350 | $480,150 | $3,324 | $103 lower per month, $16,500 lower price |
Look at what that table says. In all three of these futures, the buyer who waited ends up with a lower payment than the buyer who paid 7.40% today. I am not going to hide that. If rates fall meaningfully, waiting can win on monthly payment.
So why would anyone buy now? Three things a fair comparison has to include:
- The year in between. The buyer who waits is paying rent for those 12 months. The buyer who bought has made about $41,127 in principal and interest payments, of which roughly $4,653 went to paying down the loan balance. Ownership also brings taxes, insurance, and maintenance that renters do not pay, so add those to be fair.
- Negotiation. If today's seller covers a 2-1 buydown or closing costs, that changes the math in a way a more competitive market may not allow later.
- The fourth outcome. Rates could stay where they are or go higher, and prices could keep rising. Then the buyer who waited pays more for the same home at the same or a higher rate.
The honest conclusion is that no scenario wins every time. The right comparison uses your rent, your savings, your timeline, and the actual home, measured over the same number of years. You can try your own numbers in the buy now vs wait calculator.
Don't just negotiate the purchase price. Negotiate your purchasing power.
Most buyers think negotiation means getting the price down. That is one tool. Here is how $10,000 can work three different ways on the example above.
- $10,000 off the price. With 10% down, your loan drops by $9,000 and your down payment by $1,000. The payment falls by about $62 a month, for as long as you keep the loan. Small each month, but permanent.
- $10,000 seller credit toward closing costs. Your payment does not change, but you may bring about $10,000 less to closing. For a buyer who is short on cash but comfortable with the payment, this can matter more than a lower price.
- $10,000 seller credit toward a buydown. On this example, that covers most of a 2-1 buydown, which lowers the payment by about $648 a month in year one and $331 in year two. Bigger relief early, none after year two. The same credit could instead go toward a permanent rate buydown (discount points), which lowers the rate for the life of the loan by a smaller amount. How much depends on the lender's pricing that day.
A few rules keep this grounded:
- Sellers cannot contribute unlimited amounts. On a conventional loan for a primary residence, the limit is generally 3% of the price with less than 10% down, 6% with 10% to 25% down, and 9% with more than 25% down. FHA generally allows up to 6%. VA has its own rule that generally caps certain concessions at 4%. In the example above, 6% would be $33,000.
- Credits can only pay for real costs. A seller credit can cover eligible closing costs, prepaid items, and buydown funds. You cannot receive leftover credit as cash, and it generally cannot be used for your down payment.
- The appraisal still has to support the price.
The takeaway: the lowest payment today is not always the least expensive loan over time. A temporary buydown helps most in the first two years. A lower price or a permanent buydown helps for as long as you keep the loan. Which is better depends on how long you expect to stay and how much cash you have. Here is a step-by-step look at how seller credits can lower your payment.
Can you actually afford the home? That's the most important question.
This is the part I will not compromise on.
If you cannot comfortably afford the full payment at the full note rate, it may not be the right time to buy. That is not a judgment. It is the same advice I would give my own family.
A temporary buydown should be a bonus, not the reason the numbers work. Under conventional guidelines, lenders generally qualify you at the full note rate, not the reduced early payment. That rule exists to protect you.
Never buy a home on the assumption that rates will fall or that you will refinance. If it happens, wonderful. If it does not, you need to be fine.
Your real monthly cost includes:
- Principal and interest
- Property taxes, including Mello-Roos in many newer neighborhoods
- Homeowners insurance
- Mortgage insurance, when it applies
- HOA dues
- Maintenance and repairs
- Savings for emergencies
- Everything else in your life: car payments, childcare, student loans
If the full picture feels tight, waiting and building savings is a smart decision, not a failure. I would rather help you buy the right home next year than the wrong one this year. The buying power calculator is a good place to start, and the down payment assistance finder shows programs you may qualify for.
So, should you buy now or wait?
Don't wait for a perfect market. It is not coming. Instead:
- Understand what today's market may let you negotiate.
- Be honest about what you can comfortably afford at the full payment.
- Compare buying now and waiting using your own numbers, over the same time period.
Then make the decision that is right for your family. Either answer can be the right one. If you would like help running the numbers, I am Ken Clark Jr., your Sacramento mortgage advisor, and my #ChampionsofLoans team is glad to help. Service for Success!!!