Thinking about waiting for home prices to drop or interest rates to fall? Many buyers hope the market will offer a better deal if they hold off, but it is clear why you shouldn’t wait to buy a home: waiting could cost you more. Historically, home prices rarely drop significantly, and interest rates have remained relatively steady for the past several years—small dips may be short-lived or offset by rising rates soon after. With limited inventory, strong buyer demand, and available seller incentives, acting sooner rather than later is often the smartest choice to secure your dream home at the best possible price.
Historical Perspective: Home Prices and Interest Rates
Understanding the historical trends of home prices and mortgage rates in California can provide valuable insights into the current market dynamics. Here’s a comparative chart highlighting these trends over the past ten years.
| Year | Median Home Price (Sacramento, CA)* |
Average 30-Year Fixed Mortgage Rate** |
| 2015 | $286,942 | 3.99% |
| 2016 | $313,491 | 3.79% |
| 2017 | $339,192 | 4.14% |
| 2018 | $365,454 | 4.70% |
| 2019 | $385,000 | 4.13% |
| 2020 | $419,870 | 3.37% |
| 2021 | $508,500 | 3.15% |
| 2022 | $538,250 | 5.33% |
| 2023 | $532,500 | 7.00% |
| 2024 | $550,250 | 6.90% |
* From Employment Development Department, State of California
**From Bankrate.com
As illustrated, California’s median home prices have increased significantly over the past decade. While mortgage rates have fluctuated, they have generally remained low compared to the 1980s, when rates soared into the 18% range. This is why we urge buyers to “date the rate, marry the house.” Focus on finding the home you truly love—your perfect home is a long-term investment, while rates can always be refinanced later.
The Current Housing Market: Supply vs. Demand in California
California’s housing market is experiencing a significant imbalance between the number of individuals seeking homes and the available housing units. This disparity is contributing to rising home prices and increased competition among buyers.
Housing Demand vs. Supply
Estimated Housing Shortfall: As of 2024, California faces a housing shortage of approximately 840,000 units, according to Up For Growth. However, other estimates, including those from McKinsey, suggest the shortfall could be as high as 3.5 million units.
New Build Estimates: According to the California Department of Housing and Community Development, over the past decade, California has produced fewer than 80,000 new homes per year on average. This is 180,000 units short of the projected annual need.
Homebuilders’ Challenges
Despite efforts to increase housing production, homebuilders are facing challenges:
Construction Costs: High construction costs are limiting the number of housing units being built. In 2015, lumber prices were below $200/1000 board feet; in 2025, lumber prices range from the high $500 to the low $600/1000 board feet. In one decade, lumber prices have tripled, which is only one of the many resources needed to build.
Labor Shortage: The construction industry is facing a persistent shortage of skilled workers, including carpenters, electricians, and plumbers. This limits the number of homes that can be built on schedule and increases developers’ costs, contributing to slower housing production.
The Cost of Waiting
Small delays can add up quickly:
- Rising Home Prices: Even a 5–10% increase can cost tens of thousands more for the same home.
- Missed Opportunities: Limited inventory may mean losing your preferred home or neighborhood.
- Interest Rate Increases: Even a half-percent rise can add hundreds to your monthly mortgage. Currently, Tim Lewis Communities is offering reduced rates on select Quick Move-In Homes.
If you want to know what the cost of waiting could be for you, contact us, and our preferred lender will do cost comparisons for you.
Buyer Incentives
Homebuilders like Tim Lewis Communities are offering limited-time incentives to make buying now more affordable. These can include closing cost assistance, upgrades (appliances, landscaping, design packages), and rate buydowns. Incentives like these aren’t always available, and when rates drop, many builders reduce or remove them. Taking advantage now can lower both your upfront costs and monthly payments, making it the perfect time to secure your new home.
Why You Shouldn’t Wait to Buy a Home
With home prices on the rise, interest rates constantly changing, and a limited supply of homes, waiting to buy could cost you thousands of dollars in the long run. Every month you delay may mean higher prices, fewer options, and increased competition from other buyers.
By acting now, you can lock in your dream home, take advantage of exclusive seller incentives like closing cost assistance, upgrades, and rate buydowns, and begin building equity immediately. Plus, with Quick Move-In homes, you can enjoy your new home sooner, without waiting months for construction to finish.
Don’t miss out—contact a sales agent today to explore available homes, learn about financing options, and see which homes are ready for you to move in. Your perfect home is waiting, but it won’t last forever.
FAQs
Q: Will home prices drop soon?
A: Historically, significant drops are rare. Waiting can increase costs.
Q: Are incentives for buyers available now?
A: Yes, many Tim Lewis Communities offer upgrades, rate buydowns, and closing cost support.
Q: Is it better to wait for interest rates to go down?
A: Timing the market is complex, and rates can change quickly. A smart strategy is to “date the rate, marry the house”—lock in a rate that works for you now while finding the home you truly love. You can refinance later if rates drop, but your dream home and its location can’t wait.
Q: What are Quick Move-In homes?
A: QMIs are fully built homes that are available immediately. At Tim Lewis Communities, Quick Move-In homes are always offered with beautiful design packages.
Q: How much can I save with current incentives?
A: Incentives vary but can include thousands in upgrades, closing costs, or reduced rates.
Q: Should first-time buyers wait for the market to “cool off”?
A: Waiting for the market to “cool off” is risky. While prices and rates may fluctuate slightly, significant drops are rare, and inventory is limited. First-time buyers who wait may face higher home prices, fewer options, and increased competition. Acting now allows you to lock in a home, secure financing, and take advantage of available incentives—helping you start building equity sooner rather than later.
Q: How does the housing shortage affect my buying options?
A: Limited inventory means fewer choices, more competition, and higher prices. Acting now secures your preferred home.
