Home mortgage rates have skyrocketed in recent weeks, blowing past 7.5 percent, as a sharp bond market selloff sends borrowing costs surging.
National Association of Realtors® Chief Economist Lawrence Yun predicted last week that homebuyers should prepare for 7 percent interest rates to become the "new normal."
What do these higher interest rates mean for homebuyers navigating the Greater Boston real estate market? Through the first eight months of 2026, the median price of a single-family home in Greater Boston reached $850,000, up almost 2 percent during the same period in 2025, according to data compiled from MLS Property Information Network, Inc.
Buyers Brokers Only defines Greater Boston as the City of Boston and 126 additional cities and towns within Interstate 495.
With a 10 percent down payment and a $765,000 30-year, fixed-rate loan at 7.58 percent, borrowers would pay $5,391 monthly for principal and interest. That’s $804 per month more than $4,587 when interest rates were around 6 percent in February.
The big question for first-time homebuyers is obvious: Should I wait for mortgage interest rates to decline? The most prudent approach is to buy when the home fits your lifestyle, and the payment fits your budget, treating any future opportunity to refinance as a bonus rather than a requirement.
Related: Adjustable-rate Mortgages: What First-time Homebuyers Should Know
If a 7+ percent rate stretches your debt-to-income ratio too far or compromises your emergency reserves, waiting is the responsible choice regardless of market trends. On the other hand, if you comfortably qualify for a mortgage now, you will likely face less competition for homes and find more sellers willing to negotiate.
If and when mortgage interest rates decline, say by about 1.5 percent, many sidelined homebuyers will enter the Greater Boston real estate market, and bidding wars likely will ensue. Of course, if you buy now and rates decline, you can refinance.
Waiting lets you save more for a larger down payment and reduce your monthly mortgage payment; however, rising home prices while you wait could easily offset those savings.
Preparing to buy a home is critical. Waking up on a Sunday morning and heading out to open houses without a buyer agent or a pre-approval is the biggest mistake first-time homebuyers make. Get expert advice and plan your home-buying journey before leaping into the Greater Boston real estate market.