Market Insight · 5 min read

Why Waiting for Rates to Drop Could Cost You More Than Just Building Now

Interest rates are a moving target — but material costs only go one direction

Published July 2026

The Rate Reality

Mortgage rates have been sitting in the 6-7% range for over a year now, and that's not a temporary dip before things return to the 3-4% rates people remember from a few years back. Every major forecaster, including Fannie Mae and the Mortgage Bankers Association, has 30-year rates holding in the 6.3-6.5% range through the rest of 2026 and into 2027 and 2028. A June 2026 Reuters poll of housing economists put it plainly: the current mid-6% rate environment is "not expected to fall meaningfully any time soon."

Kevin Warsh took over as Federal Reserve Chair in May 2026, and if anything, rates have crept up since he stepped in, not down. There's simply no credible forecast right now showing a return to the ultra-low rates of 2020-2021.

The Material Cost Reality

While rates have leveled off, material costs have not. Roofing materials alone are up 15-25% since 2024, driven by tariffs, manufacturer price hikes, and rising costs on steel and metal components. Lumber remains volatile. Copper is up over 20% year over year. Construction material prices overall are still running more than 40% above pre-2020 levels, and there's no indication that trend is reversing.

This is the part that gets overlooked in the "wait for rates" conversation: rates are a moving target that could go up, down, or sideways. Material costs, on the other hand, have shown a much more consistent one-directional trend, and that trend is up.

The Math That Actually Matters

Here's the comparison that matters most when you're deciding whether to build now or wait:

If you build now and rates eventually drop, you refinance into a lower rate later. Your home cost is locked in at today's price, and your monthly payment can still improve down the road.

If you wait for rates to drop and they don't (or they drop only slightly while material costs keep climbing faster), you've spent months or years paying nothing toward equity, all while the cost of the same home keeps rising. You can't refinance your way out of a higher material cost. That number is fixed the day you sign your contract.

Rates are refinanceable. Material costs are not.

So When Is the Right Time to Build?

There's no such thing as a perfect moment where rates are ideal and materials are cheap. That moment isn't coming. The realistic best time to build is when you can control the side of the equation that's actually controllable, which is the price of the home itself, by locking it in before it goes up again.

If you've been waiting for the "right time," it might already be behind you. The next best time is now.

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