We get this question more than any other: “Should I buy now or wait for rates to come down?” It’s a reasonable question, and unlike most real estate content, we’re not going to answer it with “Now is always a great time to buy!” because that’s lazy and often wrong. The honest answer is: it depends on your specific financial situation. But here’s the data that should inform your decision.
The Case for Buying Now
Appreciation Continues at a Moderate Pace
Central Oregon home prices have appreciated roughly 2-4% annually over the past two years, and most projections suggest similar modest growth through 2026 and 2027. On a $550,000 home, 3% annual appreciation means the same home costs $566,500 a year from now. If you wait two years, it’s $583,600. That’s $33,600 in additional purchase price.
Meanwhile, if you buy today, you’re building $16,500 in equity through appreciation in year one alone, plus whatever principal you pay down on your mortgage. After two years, you’d have roughly $40,000 in combined equity from appreciation and principal reduction.
You Can Refinance. You Cannot Renegotiate the Purchase Price.
This is the most compelling argument for buying in a high-rate environment. If rates drop to 5.5% in 2027 or 2028, you can refinance. Your payment drops, and you keep the home you bought at today’s price. But if you wait until rates are 5.5% to buy, you’ll be competing against every other buyer who was also waiting, in a market with limited inventory. More competition typically means higher prices.
The math is straightforward: a buyer who purchases at $550,000 at 6.3% and refinances two years later at 5.5% ends up in a better position than a buyer who waits two years and buys at $583,600 at 5.5%. The monthly payment after refinancing is lower, and the total amount borrowed is less.
Rent Is Not Free
While you wait, you’re paying rent, and that money builds zero equity. Average rent for a 3-bedroom home in Bend is currently around $2,200-$2,600 per month. Over a year, that’s $26,400-$31,200 that goes to your landlord. Over two years, you’ve spent $52,800-$62,400 with nothing to show for it.
Compare that to mortgage payments, where a portion goes to principal reduction from day one. Even at today’s rates, roughly 18-22% of each mortgage payment on a typical Central Oregon home goes to principal. You’re building equity with every payment.
The Case for Waiting
Monthly Payment Pressure Is Real
The flip side of the refinance argument: you have to be able to afford the payment at today’s rates, not tomorrow’s hoped-for rates. If buying at 6.3% stretches your budget to an uncomfortable degree, buying on the assumption you’ll refinance later is risky. What if rates don’t drop as fast or as far as expected? You need to be comfortable with the payment you’re signing up for today.
A healthy mortgage-to-income ratio is 28% or less of gross income for total housing costs. If current rates push you above 35%, waiting may be the financially responsible choice, regardless of what appreciation or refinancing might do for you later.
Inventory May Continue to Improve
If you’re patient, there may be more options available in 6-12 months. Inventory has been climbing, and more supply generally means better selection and less pressure to make rushed decisions. If you have specific requirements (school district, lot size, neighborhood) that aren’t currently met by available listings, waiting for the right home is better than settling for the wrong one.
Economic Uncertainty
If your job situation is uncertain, your income is variable, or you might need to relocate in the next 2-3 years, buying now carries risk. The transaction costs of buying and selling (typically 8-10% of the home’s value when you include agent commissions, closing costs, moving expenses, and prep work) mean you generally need to own a home for at least 3-4 years to break even versus renting.
The Numbers in Context
Let’s model two scenarios for a $550,000 home in Central Oregon with 20% down ($440,000 loan):
Scenario A: Buy now at 6.3%
- Monthly P&I: $2,732
- After 2 years of appreciation at 3%: home worth $583,600
- Equity after 2 years: $110,000 down payment + $16,400 principal paid + $33,600 appreciation = $160,000
- If you refinance at 5.5% after 2 years: new payment drops to $2,497
Scenario B: Wait 2 years, buy at 5.5%
- 2 years of rent at $2,400/month: $57,600 spent on housing with no equity
- Purchase price: $583,600 (3% annual appreciation)
- Down payment at 20%: $116,720
- Loan amount: $466,880
- Monthly P&I: $2,650
In Scenario A, you own $160,000 in equity after two years and have a payment of $2,497 after refinancing. In Scenario B, you’re starting from scratch at a higher price point with a slightly lower initial payment. The total financial position after 5 years favors Scenario A by roughly $60,000-$80,000, assuming the appreciation and rate assumptions hold.
But those are assumptions. They might not hold. And that’s the honest caveat.
A Personal Readiness Checklist
Rather than trying to time the market, answer these questions:
- Can you afford the monthly payment at today’s rates without stress?
- Do you have 3-6 months of expenses saved beyond your down payment?
- Do you plan to stay in the area for at least 3-4 years?
- Is your employment stable?
- Have you been pre-approved by a lender?
- Are there homes available in your target area that meet your needs?
If you answered yes to all six, the market conditions are secondary. You’re personally ready to buy, and today’s market is functional enough to accommodate a well-prepared buyer. If you answered no to two or more, waiting isn’t about market timing; it’s about getting your financial foundation solid first.
Browse available listings to see what’s on the market, or connect with our team to run the numbers on your specific situation. We’d rather help you make the right decision than pressure you into any decision.