Mortgage interest rates are lower today than they were a year ago. Last October, the average 30-year loan interest rate was over 7 percent. As of this writing, the average 30-year mortgage rate is 6.44%.

But just a few weeks ago, mortgage rates were close to 6 percent. So, it could be argued that now is a better time to sign a mortgage than later in 2023.

However, you may want to delay getting a mortgage. Here’s why.

1. House prices remain high

Although you can now save money on your mortgage compared to last year, house prices are more expensive than they were a year ago. The median existing home sales price in September was $404,500, according to the National Association of Realtors (NAR). That’s up 3% from a year ago, when the average home sold for $392,700. This was also the 15th consecutive month of annual increases.

Even if you’re spending a little less in terms of mortgage rate now, you may want to wait for home prices to drop further. This can happen during the winter months, when there is a natural downward trend in buyer demand. Waiting until early 2025 may help you pay less.

2. Rates could fall further

The Federal Reserve has already cut its benchmark interest rate once this year. And it is expected to proceed with additional interest rate cuts before the end of 2024.

This could lead to mortgage interest rates falling even further. If you wait a little longer to sign a mortgage, you may be able to get a rate you’re even happier with.

However, whenever you decide to sign a mortgage, you need to do your research and compare offers. you can Start by checking out this list of the best mortgage lenders and rates.

3. There isn’t a lot of inventory to choose from

NAR reported that the 4.3-month housing supply for September increased by 23% compared to the previous year. However, this figure is still below the 6-month housing supply needed to fully meet buyer demand.

When real estate inventories run low, sellers have the upper hand. They may charge higher prices because as a buyer you don’t have many options.

But as mortgage rates continue to drop as we head into the new year, more sellers may be motivated to list their homes. This can lead to an increase in inventory, more options, and better prices. So, if you can, it’s best to delay applying for a mortgage a little longer.

If you’ve been trying to buy a home for a while, you may be frustrated by your lack of progress. And now that rates are a little lower, you may be tempted to put out a mortgage. But if you delay a few more months, you may find that you can get a much better home deal and a loan to finance it.