- A credit score above 740 can lower your mortgage rate by up to 1.5%. This can save hundreds per month.
- Home values in busy markets like Las Vegas keep going up. This happens even when interest rates are higher.
- If you wait for rates to drop, home prices might get higher. This can cancel out any savings from lower rates later.
- Adjustable-rate mortgages make up 9% of new loans now. This shows buyers can be flexible when rates are high.
- Putting down 20% stops you from paying PMI. It also gets you better loan terms. This saves a lot of money over time.
Mortgage rates are going up and down. This can make buyers who are ready hesitate. Maybe you wonder if now is the right time to buy. Or maybe you wonder if you should wait for lower rates. You are not alone in this. The truth is, waiting could cost you. This is especially true in busy, fast-moving markets like Las Vegas. But you have more control than you might think. You can move through today’s market smartly. You can feel sure about your steps. You can do this with the right plan and help from pros like Las Vegas agent Steve Hawks.
Why Mortgage Rates Fluctuate
Knowing what makes mortgage rates change can help you make better choices. Mortgage rates do not change just by chance. They react to many financial and economic signs. These signs change daily. Government money policies affect many of these signs.
- The Federal Reserve: The Fed does not set mortgage rates right away. But it sets the federal funds rate. This rate affects how lenders price loans. When the Fed raises this rate to slow price increases, borrowing money usually costs more. This includes home loans.
- Inflation: When prices are going up, lenders might raise mortgage rates. They do this to make sure the money they lend keeps its value. Rising prices mean your money buys less. Higher interest rates help lenders manage this risk.
- Mortgage-Backed Securities (MBS): When people want fewer MBS, lenders raise rates. This makes the securities look better to investors. These changes happen often when the economy is not steady. We have seen this in 2023 and 2024.
These different things working together have kept rates from staying the same. Rates were very low in 2020 and 2021. Now they change a lot. This makes it hard to find the perfect time to buy. No one can be sure what rates will do in the future. So you should decide based on if you are ready and if the home is a good value for the long term. Don’t decide just because rates might change soon.
The Costs of “Waiting for the Bottom”
Many people ask, “Should I wait for a better rate?” But facts often show a different story.
The National Association of Realtors says that even small changes in how much you borrow for a home can make a big difference in your monthly payments. For example, a home that costs the average amount might cost about 24% more each month if the mortgage rate is 6.8%. This is compared to the same home with a 4.5% rate. And the money issues do not stop with monthly payments.
- Property Prices Go Up: In popular places like Las Vegas, there are not many homes for sale. Many people still want to buy. This is true for buyers from other states and people buying to rent out.
- Chance for Price Growth: Homes are going up in price by 5 to 8% a year in some areas. Waiting one year could mean the same house costs tens of thousands more. This is true even if rates go down a bit. The total cost could still be higher.
- More People Buying: If you wait until rates drop, more buyers might try to buy at the same time. This can make prices higher. It can also make it harder for you to get the price you want.
Trying to buy when rates are lowest is hard. It is often safer and smarter to buy when you are ready with your money. It is better not to wait for a situation that might not happen.
Control What You Can: Credit Score and Rate Offers
Your credit score is one of the most important things in buying a home. And it is something you can control.
Mortgage lenders use FICO scores a lot when they set your interest rate. See how your score can affect your mortgage:
| Credit Score Range | Loan Approval Chances | Likely Interest Rate | Notes |
|---|---|---|---|
| 740+ | Very High | Lowest Available | Can get the best loan types |
| 680–739 | Good | A Little Higher | Still good, but fewer extra benefits |
| 620–679 | Average | Higher Rate | May need PMI or points |
A score above 740 can get you a rate that is 0.5% to 1.5% lower than someone with a score under 680. With a 30-year loan, this is tens of thousands of dollars saved.
Want a better rate? Work on these credit things
- Use less of your available credit. (Using less than 30% is good).
- Pay everything on time. This is the most important thing.
- Don’t apply for new credit cards or loans before you get a mortgage.
- Fix any mistakes on your credit report.
Getting your credit score higher before you apply could be one of the best things you do when buying a home.
Understand Home Loan Options
People pay a lot of attention to mortgage rates. But how the loan is set up is just as key. Picking the right loan type is important. This is true when rates are high. It can affect how much room you have with your payments and if you can afford them for a long time.
Fixed-Rate Mortgages
- Good for: Buyers who plan to stay in the home for many years
- Good points: Payments are steady, you know what to expect
- Bad points: Rate is higher than ARMs at the start
Your interest rate never changes. This gives you peace of mind. Most people pick a 30-year fixed loan. This gives the most steady payments and payments that are not too high. But 15- or 20-year loans let you own more of your home faster. They also mean you pay less interest in total.
Adjustable-Rate Mortgages (ARMs)
- Good for: Buyers who plan to sell or get a new loan in 5–7 years
- Good points: Lower rate at the start
- Bad points: The rate can go up after the first set time
The Urban Institute says that ARMs were 9% of new loans in early 2024. That is up from just 4% a year before. Buyers are using ARMs so they can afford a home now. They plan to get a new loan when rates drop. Or they plan to move before the ARM rate changes.
Government-Backed Loans
- FHA Loans: Good for people buying their first home. You can put down as little as 3.5%.
- VA Loans: For veterans and military members who qualify. Often no money down and no PMI.
- USDA Loans: For homes in rural and some suburban areas. Usually no money down.
Each type of loan has different rules for who can get it. The main thing is to find the loan that works best for your own situation.
Short vs Long Term Mortgage Strategy
How long your loan is affects more than just how long you pay. It also affects your rate. And how fast you own more of your home. And the total cost.
30-Year Fixed
- Lower monthly payment
- More total interest paid
- Own less of your home more slowly
15-Year or 20-Year Fixed
- Higher monthly payments
- Much less total interest paid
- Own more of your home faster
For example: On a $350,000 loan, a 30-year loan at 6.8% might cost $2,280 each month. But a 15-year loan at 6% could cost $2,950 each month. This would save you over $150,000 in interest. You pay more each month but save a lot later.
If you buy homes to rent out, a shorter loan term can help you make more money. If you are buying your first home and money is tight, a longer loan term keeps your payments easier to handle.
Las Vegas Market-Specific Factors
Las Vegas keeps doing things that are not normal for housing markets. The city is strong. This is true even when rates are high. This is because of special things about the market here.
Things that stand out about the local market
- Many people move here: People move to Nevada for its tax rules and jobs.
- Not much land to build on: It is hard to build everywhere because of the area. This helps prices go up over time.
- Buyers who rent out homes: 1 out of 5 homes in Las Vegas was bought by someone who plans to rent it out in the last year.
- Entertainment and visitors: This makes things steady. It helps with demand for rentals and buying homes too.
Steve Hawks says, “Even when housing markets in other places slow down, Las Vegas often stays active.” It is common for homes in fast-moving areas to go up in price by $20,000–$50,000 in just 6–12 months. Making decisions without waiting can give you an edge here.
Down Payment Tactics in High-Rate Environments
Putting down more money is one clear way to make high mortgage rates feel less hard.
Good things about putting down 20% or more
- You do not pay PMI. (This saves $150 to $300 each month).
- Your loan amount compared to the home value is better. This helps get better terms.
- You pay less total interest over the life of the loan.
- Your offer to buy is stronger when other people are bidding too.
Not everyone can put down 20%. But if you are close, it might be good to wait a few months and save hard. You can also look for programs that help with down payments. Or see if your job offers housing help. These can help cover the difference.
Shopping Lenders and Rate Locks Smartly
The business of giving mortgages has a lot of competition. This is good for buyers who do their homework.
Good ways to shop for rates
- Get prices from at least 3–5 lenders.
- Look at more than just the rate. Check fees, points, and if there are costs for paying off your loan early.
- Ask if they have plans that let you get a lower rate if market rates drop after you lock.
Steve Hawks often tells clients about local lenders he trusts. These lenders offer options just for you. They also charge fewer extra fees. A good team of agent and lender can find smart ways to help. This could be combining rates or getting special deals when buying.
Temporary Rate Buydowns and Points
Things like buydowns can help lower the pain of high mortgage rates. This is very true at the start.
Temporary rate buydowns
- 2-1 Buydown: The seller or builder pays to make the rate 2% lower in the first year. And 1% lower in the second year.
- This saves hundreds of dollars each month for the first two years. This is good for buyers who think they will get a new loan later.
Mortgage points
- Makes the rate lower for good: One “point” usually costs 1% of the loan amount. It makes your rate lower by 0.25%.
- Figure out when you save money: See how long you need to live in the home to get back the money you paid upfront through lower monthly payments.
Use buydowns to make payments easier at the start. Use points to save money for many years. This is good if you know you will stay in the home for a while.
Make the Right Move for Your Situation
Don’t just wait for the market to change. Think about if you are ready.
- Is your job steady and do you make more money over time?
- Can you pay current rates without it being too hard on your money?
- Do you have enough saved for at least a 5–10% down payment and money for surprises?
- Do you plan to live in the area for at least 5 years?
If you say “yes” to most of these, you are likely in a good place to buy. This is true even if it means a higher rate now. You can always plan to get a new loan later.
Success Story: Client Who Beat Rising Rates With Strategy
One of Steve Hawks’ clients was a young couple moving from California. They decided to buy just weeks before rates went above 7%. They had good help and got a 2-1 buydown. They chose an ARM because they planned to move in a few years.
Six months later, their home was worth over $40,000 more. They were already talking about getting a new loan because rates went down a little. What happened with them shows that having a good plan is better than trying to pick the perfect time.
What You Can Do Today
You do not need to have every single thing planned out now. But getting ready starts with simple steps you can take.
- Check your credit report at annualcreditreport.com.
- Pay down credit cards or loans with high balances.
- Talk to at least three mortgage lenders.
- Learn about loan types and programs in your area that help with down payments.
- Work with an agent who knows what you want and understands the market.
Taking steps now can help you act fast when the right home comes up. It could even put you in a better money situation than you thought.
Rate Resilience Starts with Smart Moves
You cannot control the Fed or prices going up. But you can control how ready you are. Being ready to buy a home means knowing all the parts. This includes getting your credit score better. And picking the best home loan options. Don’t let being scared or not sure stop you. Help from pros like Steve Hawks can make you feel clear and sure about what to do. You can buy a home well, no matter what rates are doing.