If you’ve been sitting on the sidelines, waiting for mortgage rates to drop back below 4% before making a move, it’s time for a reality check. While we all loved the historically low rates of 2020 and 2021, those numbers were driven by extraordinary global circumstances, not typical market trends. And expecting them to return any time soon could lead to missed opportunities that may cost you far more in the long run.

During the height of the pandemic, global economic uncertainty prompted aggressive action from the Federal Reserve, which helped drive mortgage rates to record lows. In January 2021, the 30-year fixed rate bottomed out at 2.65%, the lowest in Freddie Mac’s recorded history, which dates back to 1971. But that wasn’t a normal market. It was a response to an emergency.

Looking at the big picture, the average 30-year mortgage rate over the last 60+ years has hovered around 7.74%. Even today’s rates, currently in the mid 6% range, are below that historical average. In other words, we’re not in a high-rate environment; we’re back in a normal one.

The danger in holding out for rates to drop back to those pandemic lows is that the market isn’t standing still. While you’re waiting, home values continue to rise due to ongoing appreciation, and every mortgage payment you’re not making is equity you’re not building. Between market appreciation and amortization (the reduction of loan principal with each payment), today’s buyers are building thousands of dollars in equity every year.

Let’s say home prices rise by just 5% annually, a fairly conservative estimate based on recent years. A $400,000 home could cost $420,000 or more just a year from now. That extra $20,000 increase easily outweighs any potential savings from a slightly lower mortgage rate. And if rates do dip slightly, competition will likely surge leading to bidding wars and driving prices up even more.

So, whether you’re a first-time buyer or looking to move up, the smarter question isn’t "When will rates drop?" …it’s "What will waiting cost me?"

Today’s market offers opportunities, but they won’t last forever. By acting now, you can start building equity, take advantage of current rates while they’re still below the historical norm, and avoid the risk of rising prices and tighter competition. The bottom line: Don’t let yesterday’s rates stop you from building tomorrow’s wealth.