Waiting To Time The Real Estate Market? - Interest Rates vs. Prices & Other Things To Consider

I thought I’d take a minute to chat about a hot topic I’m hearing a lot about these days: waiting to buy a property until interest rates drop. Many of my clients are eager to wait it out, hoping for a better mortgage rate. And while I absolutely want my clients to get the best deal, just waiting for rates to drop doesn’t always mean you’ll come out ahead.

If you're exploring the Vancouver Real Estate market and nearby areas right now, you’ll notice a trend that favors buyers more than it has in recent years. Unlike the past few years, where sellers had multiple offers and buyers were competing hard—often overbidding and skipping important contingencies like inspections—buyers now have leverage. Today, you’re more likely to set your own terms, avoid bidding wars, and pay closer to the assessed or fair market value. So, in my view, it’s a great time to consider buying.

I'm frequently having conversations with my buyers and often hearing, “I’ll just wait a few months; interest rates will be lower.” But historically, when rates drop, buyers flood back into the market. This quickly shifts us from a buyer’s market to a seller’s market, where competition spikes, prices rise, and that leverage you had vanishes. It’s a classic case of herd mentality—when one or two people move, everyone else follows, driving up demand and, ultimately, home values.

So, what’s the smarter choice? Paying a bit less for a home with a slightly higher interest rate or waiting for lower rates and paying more for the property itself? Personally, I feel there’s more upside in buying now at a lower price if possible, especially with the ability to do inspections and negotiate favorable terms. With a variable rate mortgage, you can always lock in the rate later if rates go down.

Here’s a quick example: let’s say a 1% drop in interest rate would save about $295 per month on a $500,000 mortgage. So, if you bought a $650,000 home now with $150,000 down, you’d have a $500,000 mortgage. Over a year, that’s an extra $3,540 paid  due to the slightly higher rate. But if rates do drop and buyers rush in, that same $650,000 property will likely be priced much higher than $653,540 (the original price + that extra year’s interest difference). So why not buy now, secure the property, and then take advantage of the lower rate later? That way, you get the best of both worlds!

As the saying goes, “You marry the house, but date the rate.”

I've reached out to a mortgage broker I work with, Chris Morrow from 4Front Mortgages, who has provided a helpful chart on rate/payment differences and potential property appreciation. Here’s the point: if you invest in the current market you'll pay roughly $3,500 extra in a mortgage for a year, but if over that time you see a 7% increase in your property value, you’d be gaining roughly $42,000 in equity on a $600,000 purchase— pay $3,500 to make $42,000 sounds like a pretty solid investment!

Of course, there’s a lot to consider when buying a home, and I’m not saying “now” is the perfect time for everyone. But if you’re prepared and just waiting for a rate drop, it might be time to take a closer look. Timing the market perfectly is almost impossible, and waiting too long can mean missing out. Another question to think about. Have you felt or ever heard someone say, "I wish I would have bought 5 years ago". Or the flip side of that coin, have you ever heard a home owner in the Vancouver Market say, "I regret getting into the market"? I don't know about you, but I personally hear that first statement much more often.

If you have any questions about any of this, or if you want to chat further, I’m here to help, and happy to do so, just give me a call at 778-927-4306! Additionally, feel free to reach out to Chris for any mortgage-specific questions, his contact info is below:

Chris Morrow
4Front Mortgages
Phone: (604) 728-6642
Email: [email protected]
Website: ​https://4frontmortgages.com/personnel/chris-morrow/