Why Are Interest Rates Still So High? (And Why That Shouldn’t Stop You From Buying a Home)

If you’ve been watching the housing market lately, you’ve probably asked yourself the same thing many others have: “Why are mortgage interest rates still so high?”

It’s a fair question—and one I get often. After all, we’ve been hearing that inflation is cooling off, so where’s the relief on home loan rates?

Let’s unpack what’s really happening—and more importantly, why waiting for the “perfect rate” could cost you more in the long run.

The Sticky Truth About Interest Rates

Mortgage rates tend to follow the 10-year Treasury yield, and that yield is heavily influenced by expectations around inflation and the Federal Reserve’s decisions. Even though inflation has come down from its peak, it’s still above the Fed’s comfort zone. That’s kept them cautious.

So, while the Fed hasn’t raised rates recently, they’re also not eager to cut them too soon and risk reigniting inflation. That uncertainty makes investors—and lenders—price mortgage rates a bit higher to hedge against future risk.

In short? The market is waiting for more consistent signs of economic stability. Until then, rates are likely to remain “sticky” and higher than we all wish.

But Here’s the Bigger Picture: You’re Buying the Home, Not the Rate

Let’s say it clearly—marry the home, date the rate.

Your interest rate isn’t permanent. If you find a home you love and can afford, there’s no reason to sit on the sidelines hoping for a miracle drop in rates. Historically, homeowners refinance when rates dip. That opportunity will come around again.

What won’t? The exact home you’re eyeing right now. Inventory is tight, and when demand spikes (which it will when rates eventually drop), you could face more competition and higher home prices.

What You Can Do Now

If you’re feeling hesitant, here are a few smart strategies to help you navigate:

1. Get Preapproved Now
   Lock in what you can afford today. Even if rates come down later, you’ll be ready to act when the right home hits the market.

2. Negotiate for Seller Credits or Rate Buydowns
   Some sellers are willing to help buyers reduce their upfront rate. I help clients navigate these opportunities every day.

3. Plan for a Refinance Later
   Don’t forget: You’re not stuck forever. Many homeowners refinance in 1–3 years when rates shift.

Bottom Line

Yes, rates are higher than what we saw in 2020 and 2021—but so is rent. And while you wait, home prices continue to rise in desirable areas like the Texas Hill Country.

If you find the right home, don’t let today’s rate be the reason you miss out. Let’s focus on what you can control—finding a home that fits your life and your long-term goals.