The Cost of Waiting

Trying to time any market like stocks or real estate is almost impossible. Santa Clara County is especially difficult. Since 2010 home prices have increased steadily year over year with a slight flattening in 2025. Waiting to buy a home in California often costs hundreds of thousands of dollars due to persistent home price appreciation and high rents. With median home prices over $1.5M in Santa Clara County as of early 2026 and low inventory, waiting typically leads to higher purchase prices, larger down payments, and missed equity gains. 

Key Costs of Waiting to Buy in CA

• Rising Home Prices: California homes are expected to continue appreciating, meaning delaying a purchase likely means paying more later. Since 2020, affordability has dropped, with only 23% of households able to qualify for a mid-tier home in early 2026.
• Missed Equity Gains: Every month spent renting is an opportunity cost where you miss out on potential appreciation and pay down your own mortgage.
• Higher Competition & Prices: If interest rates drop, buyer demand is projected to spike, which could drive up home prices in competitive California markets.
• Increased Down Payment: As home prices rise, the amount needed for a down payment also increases.
• Cost of Renting: Paying rent is money that could have been used to build equity in your own property.

Important Considerations

• Refinancing Option: Instead of waiting for lower rates, many buyers are purchasing now and planning to refinance if rates drop later.
• High Demand vs. Low Supply: The chronic housing shortage in California ensures that demand remains high, supporting home prices even when interest rates are elevated.
• Market Timing: Attempting to time the market is risky; experts suggest buying when you are ready, as prices rarely drop significantly in California.

For Example:

Buying Today

If you purchase a home today at $3 million with 20% down ($600,000), you will have a $2.4 million loan. At a 6% interest rate on a 30-year fixed mortgage, your principal and interest payment would be approximately $14,389 per month.

Scenario 2: Waiting Two Years

If you wait two years and the interest rate did drop to 5%, the final price is projected to increase to $3.5 million due to market appreciation and increased competition created by an interest rate drop. Your 20% down payment will need to increase to $700,000, leaving a loan of $2.8 million.

While your mortgage rate might drop to 5%, your actual payment would be slightly lower at $15,031 per month. This demonstrates that the impact of a 16.7% increase in the purchase price could outweigh the benefit of a 1% drop in interest rates.