A Message from Eddie Rios · The 925 Agent
You're waiting for rates to drop.
Here's what that's actually costing you.
10 years of California home price data, real mortgage math, and one question nobody wants to answer — what if rates never come down to where you need them?
Let's Be Honest
The concern is valid.
The strategy of waiting isn't.
When a client tells me rates feel too high, I don't push back. They're right — compared to 2020 and 2021, today's rates feel like a gut punch. Nobody likes paying more interest than they have to.
But here's what I've watched happen over and over in this market: people wait for rates to drop. They put their search on hold. They keep renting. And while they wait, the one thing they can't control keeps climbing — the price of the home itself.
The question isn't whether rates are high. The question is: what does waiting actually cost you? Not in theory — in real dollars, based on 10 years of California data.
Let me show you exactly what I mean. Scroll through this — all the way to the end — before you make any decisions.
10 Years of Evidence
Rates went up. Rates went down.
Prices just went up.
Look at the chart below carefully. Notice that rates are not on some straight-line path. They peaked in 2018 at 4.54%, dropped to 2.96% in 2021, then climbed to 7.38% in 2023 — and are now back down to 6.72%. Rates have done exactly what people say they're waiting for: they dropped. Dramatically.
Now look at home prices during those same years. They didn't pause. They didn't wait for certainty. California's median home price climbed from $454K to $869K — nearly doubling — across every single rate environment.
Rates dropped from 3.94% to 3.11%. The "perfect time" finally arrived.
Buyers who waited for lower rates got them. But the home that cost $577K in 2019 now cost $659K — an $82,000 price increase that wiped out the rate savings almost immediately.
Rates hit all-time lows: 2.96%. The "cheapest money ever." Prices exploded.
The historic low of 2020-2021 triggered a buying frenzy. Demand surged — and prices jumped from $659K to $786K (+$127K) in a single year. Low rates fueled higher prices.
Rates doubled. People said "I'll wait." Prices barely moved.
Rates jumped from 2.96% to 7.38% — the fastest rate increase in modern history. Buyers panicked and sat out. But California prices only dropped from $822K to $810K. The "crash" that never came.
The Real Numbers
What does 1% actually cost you
on your monthly payment?
Let's get concrete. On a $700,000 home — a reasonable entry point in much of the East Bay and Tri-Valley — here's what a 1% difference in interest rate actually means to your wallet each month. We'll run this across three loan types so you can see where you fall.
| Rate | Monthly Payment (P&I + MIP) | vs. 6.75% | Annual Difference |
|---|---|---|---|
| 5.75% | $4,252 / mo | −$439/mo | Save $5,268/yr |
| 6.75% (Today) | $4,691 / mo | — | — |
| 7.75% | $5,149 / mo | +$458/mo | Cost $5,496/yr |
| Rate | Monthly Payment (P&I + PMI) | vs. 6.75% | Annual Difference |
|---|---|---|---|
| 5.75% | $3,992 / mo | −$409/mo | Save $4,908/yr |
| 6.75% (Today) | $4,401 / mo | — | — |
| 7.75% | $4,828 / mo | +$427/mo | Cost $5,124/yr |
| Rate | Monthly Payment (P&I only) | vs. 6.75% | Annual Difference |
|---|---|---|---|
| 5.75% | $3,268 / mo | −$364/mo | Save $4,368/yr |
| 6.75% (Today) | $3,632 / mo | — | — |
| 7.75% | $4,012 / mo | +$380/mo | Cost $4,560/yr |
Those are real numbers. A 1% rate difference is genuinely meaningful — nobody is saying it isn't. But now we need to ask the harder question: what does the home cost while you're waiting for that rate to arrive?
The Part Nobody Talks About
The rate savings sounds great.
Here's what it ignores.
California's median home price has appreciated at an average of 6% per year over the last decade. That means the $700,000 home you're eyeing today is likely to cost around $742,000 this time next year — whether rates go down or not.
So the real question is: what do you actually gain or lose by waiting 12 months for a better rate? Let's run both scenarios — the best case and the worst case.
You wait 1 year — and rates actually drop to 5.75%
You wait 1 year — and rates stay exactly where they are
The Question Nobody Wants to Ask
This isn't a hypothetical. California buyers have been here before. In 2015, rates were at 3.85% and buyers said they were waiting for them to drop to 3%. Instead, they went to 4.54% in 2018 before finally dropping — and by then, the median home was $127,000 more expensive.
Even the people who did get their lower rates in 2020-2021 watched prices leap so fast that the rate advantage was absorbed within months. The market does not wait for you to feel comfortable.
The buyer who waited from 2015 to 2021 for "the right rate" — and finally bought when rates hit their all-time low — paid $332,000 more for the same California home. The rate savings over 30 years? Nowhere close to $332,000.
The Strategy That Actually Works
Marry the home. Date the rate.
There's a phrase every experienced real estate advisor knows: marry the home, date the rate. It sounds simple, but it's backed by math.
When rates drop — and they do, cyclically — you can refinance. Refinancing is a one-time transaction. You pay a fee, you get a new rate, and your payment drops. Buyers who purchased in 2022 and 2023 at 7%+ are already refinancing today at 6.7%. Some are waiting to refinance into the 5s when they arrive.
What you cannot do is refinance the purchase price. You cannot go back and buy a home at what it cost last year. Every year you delay, the entry point gets harder — a larger down payment, a bigger loan, a higher monthly payment, regardless of rate.
The people who built real wealth in California real estate didn't buy when everything felt perfect. They bought when they could. And the market rewarded them for it.
Refinancing when rates drop
If rates fall 1–2%, a refinance takes 30–45 days and typically costs $3,000–$5,000. Your new lower payment starts the next month. You keep the home you bought at yesterday's price.
Going back to buy at last year's price
Once that home is sold at $700K, it's gone. The next comparable listing might be $730K or $750K. You can never retroactively lock in a price. Waiting has a cost that compounds every single month.
Equity builds whether you're watching or not
Every month you own, you're paying down principal and capturing appreciation. Every month you rent, 100% of that payment is gone. There is no equity in renting — only in owning.
The Bottom Line
This isn't about ignoring rates.
It's about what actually matters more.
Here's what a decade of California real estate data tells us clearly:
A 1% rate difference on a $700K home costs you $364–$439 per month. That's real money — and if rates drop, you refinance and get it back. But a 6% price increase on that same home costs you $42,000 in purchase price, $8,400 more in down payment, and $218 more per month — at whatever rate you eventually buy at. And you cannot refinance that.
The buyers who win in California aren't the ones who timed the market perfectly. They're the ones who stopped waiting for perfect and started building equity.
Rates at 6.75% are not historically unusual. From 1971 to 2002, the 30-year fixed rate never once dropped below 7%. Millions of Americans built wealth, raised families, and paid off homes during that era. The idea that you should only buy at sub-4% rates is a myth born from a two-year window — 2020-2021 — that was an anomaly in 50 years of mortgage history.
I'm not asking you to make a reckless decision. I'm asking you to make an informed one. If you can qualify, if you have the down payment, and if you plan to stay for 3–5+ years — the data makes a very clear argument for moving forward.
You can never go back and buy at today's price.
— The one rule of California real estate that has held true for 50 years.
Your Move
Let's build your game plan
around what you can control.
I'll walk you through the numbers specific to your situation — budget, loan type, market, and timeline — so you can make a decision based on data, not anxiety.
Book a Free Consultation