Prospective homebuyers waiting for mortgage rates to fall may be waiting for conditions that only a major global crisis would create. Current 30-year fixed mortgage rates of about 7.25% are not an anomaly, according to Jason Huerkamp of Huerkamp Home Group in the Twin Cities.
That figure matches the historic 50-year average. The low rates buyers still use as a benchmark were the outlier, not the norm. Huerkamp argues that waiting has now gone on long enough to become a financial risk of its own.
Many buyers still anchor their expectations to the unusually low mortgage rates of recent years. Huerkamp says treating those rates as a baseline misreads how mortgage markets work.
“The historic 50-year average for a 30-year mortgage sits at 7.25%,” Huerkamp says. “That’s where we’re sitting right now.”
His point is not that rates are low. It is that they are normal. By historical standards, the low-rate period buyers hope to return to was a brief and extreme deviation. Huerkamp says buyers who understand this should stop asking when rates will drop. Instead, they should ask whether they are willing to wait indefinitely for conditions that may take a crisis to produce.
Huerkamp is direct about what a return to ultra-low rates would mean. “If we ever got back to a 3% interest rate, something horrendous would have to happen on a geopolitical situation,” he says.
This view changes the conversation. A buyer waiting for 3% is not waiting for a favorable market. That buyer is waiting for a scenario in which job security, asset values, and lending standards could all weaken at the same time. Low rates would be available, but the surrounding conditions would make buying a home far more complicated than it is today.
Huerkamp says the rate-waiting mindset is one of the most consistent patterns he sees in conversations with buyers. “People have been saying that now for the better part of four years that they’re going to wait for interest rates to go down,” he says.
National sales data shows the scale of this hesitation. According to Huerkamp, the U.S. is on track for a fourth straight year of about 4.1 million home sales. That is well below the roughly 5.5 million annual sales he considers a normal level. He attributes much of the gap to buyers who have stepped out of the market to wait for rate relief that has not arrived.
“How long do you want to wait?” Huerkamp asks. “Because that waiting game takes time.”
Rates have moved up and down. Huerkamp notes they have ranged from about 6% to 8.25% over the past several years, but they have not fallen decisively. Buyers who set a mental threshold of 6% or lower have watched rates approach that level and then pull back several times. Each cycle reinforces the habit of waiting without delivering the result buyers expect.
For buyers who do act, rates create another complication in markets like the Twin Cities’ south metro. Huerkamp says sellers of existing homes compete directly with builders who pay to lower buyers’ interest rates, sometimes to near 5%.
A buyer comparing a $450,000 resale home at 7.25% with a $600,000 new build at 5% may find the new construction carries a lower monthly payment despite the higher price. Huerkamp estimates the rate difference alone eases affordability pressure by nearly 25%. Sellers who ignore these incentives risk staying on the market far longer than expected.
Huerkamp acknowledges that higher rates create real affordability pressure and add to buyer hesitation. His argument is narrower. For buyers who genuinely need or are ready to move, rates should not be the deciding factor when they sit at their long-term average.
“I don’t think I’d hold your breath anymore if I was a buyer or a seller,” Huerkamp says. “If you’re going to move, you’re going to move, so you’re going to have to figure it out.”
Some buyers have spent four years waiting for rates that the 50-year average suggests were never coming back. For them, the bigger risk is no longer just the cost of borrowing. It is the growing cost of inaction.
About the Expert: Jason Huerkamp is co-founder of Huerkamp Home Group, a Twin Cities team operating across the south metro, including Burnsville, Lakeville, and Prior Lake, Minnesota, since 2001.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.
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