As seasoned Albuquerque real estate professionals who’ve guided families through multiple market cycles over the past two decades, we at the Sandi Pressley Team hear this question almost daily: “Should I wait for interest rates to come down before buying a home?” It’s an entirely understandable concern, especially when mortgage rates are hovering around 6.75% compared to the ultra-low rates we saw during the pandemic years.
The honest answer we give our clients might surprise you: waiting for dramatically lower rates could cost you significantly more money in the long run, and here’s why the math works against waiting in our current Albuquerque market.
First, let’s take a reality check and address expectations about where rates are heading. We’ve been doing this a long time, and while we’re not mortgage professionals, we do know how to access the most accurate information for our clients.
According to most economic forecasters, mortgage rates are projected to hover in the mid-6% range throughout 2025. This means that they may fluctuate a little bit, but 3% and 4% rates are not in the foreseeable future. The Federal Reserve’s monetary policy and broader economic conditions suggest that today’s rates, while higher than recent years, are closer to historical norms than the 3% – 4% we’ve become accustomed to.
The Federal Reserve’s monetary policy, history and broader economic conditions suggest that today’s rates, while higher than recent years, are closer to historical norms. This means that waiting for rates to drop to 5% or lower could leave you waiting indefinitely, watching home prices climb while you sit on the sidelines. We’ve seen this scenario play out numerous times before, particularly for clients who missed their opportunity to secure a housing investment and profit from market appreciation.
So exactly what is the appreciation factor here in Albuquerque? We’re watching home prices continue their steady upward trajectory at approximately 3-4% annually. This consistent appreciation might not seem dramatic month to month, but it compounds quickly. On a median-priced home of around $350,000, that 3-4% annual increase represents $10,500 to $14,000 in additional cost each year you wait.
Let’s put this in perspective: if you’re hoping rates will drop by one percentage point over the next year, that might save you roughly $200 per month on your mortgage payment. However, if home prices increase by even 3% during that same year, you’ll need an additional $10,500 just for the down payment, not to mention the higher monthly payments on a more expensive home. So, if you’re waiting, the math doesn’t work in your favor.
One of the most powerful concepts we share with hesitant buyers is this: you marry the house, but you date the interest rate. This means that refinancing is a reality to accept. When you purchase a home, you can always refinance later if rates improve, but you can never go back and buy that same home at today’s lower price once it appreciates.
We’ve helped numerous families refinance over the years when market conditions improved, and it’s always a straightforward process for homeowners with equity and good payment history. What we can’t do is help someone buy yesterday’s home at yesterday’s price. That opportunity is gone forever.
Another thing we’ve learned over the years is that market momentum favors action! Our local market data shows that homes are selling within 28 to 31 days on average, indicating strong buyer demand despite current interest rates. This quick absorption rate tells us that qualified buyers recognize the value in acting now rather than waiting for perfect conditions that may never materialize.
The buyers we’re seeing succeed in today’s market understand that homeownership is a long-term investment. They’re thinking in terms of building equity over five, ten, or twenty years rather than optimizing for the lowest possible monthly payment in year one. This perspective allows them to focus on finding the right home in the right neighborhood while rates and prices are still reasonable by historical standards.
We also warn buyers about the hidden costs of waiting that they may not have considered. Beyond the evident price appreciation, waiting also carries hidden costs that many buyers don’t initially consider. Rent continues to increase annually, often matching or exceeding the rate of home price appreciation. This means you’re paying more each year for the privilege of not building equity, while simultaneously watching your target homes become less affordable.
Additionally, in today’s market, we’re finding limited inventory in desirable neighborhoods. You may fall in love with a home today. Still, that specific home might not have a comparable option available next year, forcing you to either compromise on your wishes or pay significantly more for similar features in a different location.
So, if you’re on the fence, how can you make a smart move? The wisest buyers in today’s market are those who focus on what they can control: finding a home they love, in a neighborhood they want to live in, at a price they can comfortably afford with current interest rates. Our happiest clients understand that trying to time the market perfectly is a losing strategy that often results in paying more and getting less.
We’re helping these buyers identify properties with strong potential for appreciation, in established neighborhoods with good schools and amenities. These homes perform well regardless of short-term market fluctuations and provide the stability and equity building that makes homeownership such a powerful wealth-building tool.
If you’re currently renting and have the financial capability to buy, the question isn’t whether interest rates might be lower next year. The question is whether you can afford to wait while home prices continue climbing and your rent keeps increasing without any equity benefit.
You’re standing at the crossroads and need to decide. After helping countless Albuquerque families navigate these decisions, we’ve learned that the “perfect” time to buy is almost always when you’re financially prepared and have found a home that meets your needs. Market timing strategies rarely work out as planned, but buying a house you can afford in a neighborhood you love almost always does.
Families who purchased homes five years ago at higher interest rates, but lower prices, now enjoy substantial equity and lower monthly housing costs compared to current renters. Those who waited for better conditions often find themselves priced out of the neighborhoods they originally wanted.
Ready to explore your options? Contact the Sandi Pressley Team today at (505) 263-2173 or visit us at https://www.sandisells.com/ Let’s discuss your specific situation and help you determine whether now is the right time for you to make your move in our dynamic Albuquerque market.
The Sandi Pressley Team has been helping Albuquerque families make smart real estate decisions for over 20 years. As longtime residents and recognized local market experts, we provide the insights and guidance you need to navigate today’s market with confidence.
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