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🏡Should You Buy a Home in a High-Interest Market?

The Real Math Behind Today’s Rates (2025 Guide)**

By EGA Homes | Veteran-Owned Real Estate Brokerage | Riverside, CA

Published November 2025

Over the last two years, rising interest rates have caused many buyers to wonder whether they should hit pause on purchasing a home. The headlines sound intimidating, the monthly payment calculators feel discouraging, and many people think rates need to drop before it “makes sense” to buy.

But here’s the truth: the cost of waiting is often higher than the cost of buying.

In 2025, the real question isn’t “Are interest rates high?”—it’s “Does waiting actually benefit me financially?”

Let’s break down the real math, the real market conditions, and the real opportunities available to today’s Southern California buyers.

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1. Home Prices Are Still Rising — Even With Higher Rates

Many people assume that when rates go up, prices come down.

But in Southern California—especially the Inland Empire—home values remain strong because:

• Inventory is still historically low
• Population growth continues
• More homeowners are staying put
• New construction can’t keep up with demand

In other words: high rates didn’t cause a price crash.

Waiting for lower rates may only mean paying more for the same house later.

Example:

If home prices rise just 4% next year (a modest, realistic increase), a $600,000 home becomes $624,000.

That’s $24,000 more, even before interest rates are considered.

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2. The Real Math: Buy Now, Refinance Later

This is the strategy most successful buyers are using in 2025.

If rates drop in the future (which experts still expect), you can refinance into a lower payment.

But if prices continue to rise, you may lose the window of affordability altogether.

Buying now = locking in the price.

Refinancing later = locking in the better rate.

This gives you the best of both worlds.

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3. The Cost of Waiting: A Simple Breakdown

Let’s compare two scenarios for a $600,000 home:

Buy Now (Example: 7% rate)

Payment ≈ $3,992/mo (principle + interest)

Wait One Year (Home +4%, rate drops to 6%)

New price: $624,000

Payment ≈ $3,741/mo

You save $251/mo — but you paid $24,000 more for the home.

At that pace, it takes almost 8 years before the lower rate saves you enough to offset the higher price.

Conclusion:

A slightly lower rate rarely beats the cost of rising home prices.

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4. Creative Financing Options Many Buyers Don’t Realize They Have

High interest market?

No problem — there are strategies that can lower your payment immediately:

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Seller Rate Buydowns

Many sellers will contribute toward lowering your interest rate temporarily or permanently.

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VA Loans (for Veterans & Active Duty)

No down payment, no PMI, competitive rates — the most powerful tool in real estate.

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Down Payment Assistance (DPA)

Many EGA Homes listings qualify for up to $200,000 in assistance.

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Adjustable-Rate Mortgages (ARMs)

Safe and strategic when used correctly, especially if you plan to refinance.

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Closing Cost Credits

Use seller credit to offset upfront costs and buy down your rate.

At EGA Homes, we walk you through all options and help you choose the smartest path.

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5. The Smartest Buyers Look at Long-Term Wealth, Not Just Rates

Here’s what hasn’t changed:

Real estate builds long-term wealth.

Even in high-rate markets, homeowners benefit from:

• Equity growth
• Price appreciation
• Tax advantages
• Fixed monthly payments (vs rising rents)
• Generational wealth-building

Renters, on the other hand, gain none of these benefits — and rents in Southern California continue to climb.

Buying a home isn’t just a payment.

It’s a financial plan.

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6. Should You Buy Now? Here’s How to Know.

You should consider buying now if:

✔️ You can comfortably afford the payment

✔️ You plan to live in the home at least 2–3 years

✔️ You want to build equity instead of paying rent

✔️ You have access to DPA or VA benefits

✔️ You want to lock in today’s price before values rise again

You may consider waiting if:

❌ You’re unsure where you’ll live long-term

❌ You need to dramatically improve credit or savings first

❌ Your monthly budget would be too tight

Every situation is different — and that’s why EGA Homes takes a personalized, veteran-minded approach to your financial goals.

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Final Thoughts: High Rates Shouldn’t Stop You — Lack of Strategy Should

Interest rates are only one part of the bigger picture.

Smart buyers focus on:

• Price
• Timing
• Equity
• Long-term goals
• Available programs
• Market trends

When you look at the full math, buying now and refinancing later is often the most financially sound path.

At EGA Homes, we don’t push you — we guide you with transparency, integrity, and real numbers.

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Thinking About Buying? Let’s Break Down Your Options Together.

Email: info@EGAHomes.com

Call: (951) 777-1016

Visit: www.EGAHomes.com

EGA Homes

Veteran-Owned Real Estate Brokerage | Riverside, CA

DRE# 01334483