Don’t Let Interest Rates Deter You From Building

Should You Delay Buying a Custom Home Due to Rising Interest Rates?

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July 5, 2022

Interest rates are one of the biggest stories of the summer—and one of the biggest concerns of potential home buyers. With rates increasing and other economic pressures mounting, should you delay building your custom home? If it’s something you’ve been planning and budgeting for, waiting might not be the best idea.

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Why not? Mainly because real estate doesn’t tend to get cheaper over the long term. It’s tempting to wait out mortgage rates, but the fact of the matter is that the cost to build a custom home rarely goes down. Even as the current surge in material prices and labor costs slows, historically prices rise, so the savings you might see if mortgage rates go down can easily get swallowed by other expenses.

What’s more, consider the fact that your interest rate is spread out over 30 years, but the hard costs of building a home get factored into your mortgage right now, therefore impacting what you qualify for and what your monthly payment will be. A quick calculation on’s amortization schedule calculator shows that a 6.0% rate on a $900,000 loan will result in a monthly payment of $5,396; a 5.5% rate on a $1.2 million loan two years from now results in a monthly payment of $6,813.

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These factors are amplified in the Puget Sound area, which continues to be a popular place to live and relocate to. Ongoing demand will continue to fuel price increases.

And keep in mind that you have the option to refinance your mortgage when and if rates drop down the road.  

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Aside from the direct monetary costs, it’s also important to consider the emotional side of waiting to delay your dream home. Staying where you are, whether in a house you don’t love or a rental, means that life continues unsettled. It means continuing to make fixes and repairs. It means less time living your dream. Time and time again, we hear that people regretted waiting, not the other way around.

Certainly, buying a home is a big decision that can’t be taken lightly. But if you’ve been saving and planning and are financially ready, don’t let mortgage rates deter you from your plans. You’ll end up costing yourself more money while putting your dream home on hold.

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