Thinking About Buying Your First Home? What California Buyers Should Know Before They Wait

Higher mortgage rates and uncertain headlines may make waiting seem like the safest choice—but understanding your budget, credit, loan options and local housing market can help you decide when the time is right for you.

If you're thinking about buying your first home, you may be asking a very reasonable question:

Should I buy a home now—or should I keep renting and wait?

With mortgage rates remaining elevated, home prices significantly higher than they were several years ago, and economic headlines creating uncertainty, waiting can seem like the safer choice.

For some people, it may be.

But there's an important difference between waiting for the housing market and preparing to become a homeowner.

Rather than trying to predict exactly where mortgage rates or home prices will be six months or a year from now, a better first step may be to find out where you stand today.

You might discover that you're ready to buy.

You might discover that you're close, but could benefit from improving your credit, reducing some debt or saving additional money.

Or you might determine that buying isn't the right decision yet.

All three can be good outcomes if they're based on your actual financial situation rather than headlines or assumptions.

Rent or Buy? Start With Your Own Situation

There is no universal answer to whether renting or buying is better.

Renting can provide flexibility and generally transfers much of the responsibility for major repairs and maintenance to the property owner.

Homeownership can provide stability, the opportunity to build equity over time and greater control over where and how you live. But it also comes with expenses and responsibilities that renters may not have.

The decision should consider more than whether a mortgage payment appears similar to your current rent.

Ask yourself:

• How long do I expect to live in the area?
• Is my employment and income reasonably stable?
• Do I have savings beyond what I would need to purchase the home?
• What monthly housing expense would be comfortable for me?
• Am I prepared for repairs and maintenance?
• How important is the flexibility of renting?
• Would owning a home fit my longer-term financial and personal goals?

And then there's another question:

If I decide to wait, what exactly am I waiting for?

Should You Wait for Mortgage Rates to Fall?

As of August 13, 2026, Freddie Mac reported that the average national rate for a 30-year fixed-rate mortgage was 6.67%.

That's considerably different from the historically low mortgage rates buyers saw during 2020 and 2021.

It's therefore understandable that some prospective buyers are thinking:

“I'll just wait until mortgage rates come down.”

But there's another side to that strategy.

You probably aren't the only buyer waiting.

If mortgage rates decline enough to significantly improve affordability, some buyers currently sitting on the sidelines may return to the market. More buyers competing for the same homes can mean increased competition—and potentially upward pressure on home prices.

That doesn't mean prices will suddenly surge if mortgage rates decline. Nobody knows exactly what future rates, inventory or home prices will be.

But recent history gives us an interesting example of why a lower-rate environment isn't necessarily an easier home-buying environment.

What Can 2020 and 2021 Teach Today's Buyers?

Consider what happened in Fresno County.

According to historical California Association of REALTORS® data, the annual median price of existing homes sold in Fresno County increased from approximately:

From 2015 through 2019, Fresno County's median existing-home price increased approximately 30%. By 2021, it was approximately 70% higher than in 2015. And by 2024, despite substantially higher mortgage rates than buyers experienced during 2020 and 2021, the annual median remained approximately 93% above its 2015 level.  

That doesn't mean home prices will continue rising at the same pace—or that buying today is right for everyone. It simply illustrates why waiting for the “perfect” combination of lower rates and lower home prices can be difficult.  

Historically low mortgage rates were one important factor supporting buyer demand during that period, but they weren't the only factor. Limited housing inventory, changing housing preferences, demographics and other economic conditions also contributed.

Inventory helps illustrate just how unusual that market became.

Realtor.com housing data reported through the Federal Reserve Bank of St. Louis show that Fresno County had only 477 active single-family, condo and townhome listings in February 2021.

By June 2026, that number had risen to 1,524 active listings.

That's more than three times the active inventory available during that exceptionally tight month in 2021.

Today's buyer therefore faces an interesting trade-off.

Mortgage rates are higher, which affects affordability. But buyers may also have more homes to choose from and potentially face less intense competition than buyers experienced during portions of 2020 and 2021.

The lesson isn't that home prices are going to repeat what happened in 2020 and 2021.

It's that waiting for lower mortgage rates doesn't guarantee that buying a home will become easier or less expensive.

You may be able to refinance an interest rate later. You can't go back and buy the home at yesterday's price.

Of course, refinancing is never guaranteed. Future rates, property value, credit, income, qualification requirements and closing costs all matter.

That's why trying to perfectly time the housing market can be so difficult.

Sometimes Waiting Really Does Make Sense

None of this means you should buy a home simply because you're worried prices might increase.

Sometimes waiting is absolutely the right decision.

Maybe your credit needs some work.

Maybe paying down credit-card balances could improve your financial position.

Maybe you need additional time to build savings.

Perhaps your employment or income is changing.

You may want to investigate down-payment-assistance programs or determine whether eligible gift funds from family could help with the purchase.

Or perhaps the estimated monthly housing expense simply isn't comfortable for you yet.

If that's the case, don't think of yourself as sitting on the sidelines.

Use the time to prepare.

There is a significant difference between postponing homeownership and preparing for homeownership.

A buyer who spends the next six or twelve months improving credit, reducing debt, building savings and learning about available mortgage programs may be in a much stronger position when the right house and opportunity arrive.

You May Need Less Money Down Than You Think

One of the biggest misconceptions among prospective first-time homebuyers is that they need a 20% down payment.

For many qualified buyers, that simply isn't the case.

Several mortgage programs may provide substantially lower down-payment options.

Conventional options can include programs such as Fannie Mae HomeReady® and Freddie Mac Home Possible®, which may offer down payments as low as 3% for eligible borrowers.

FHA financing may provide another option for buyers who have a smaller down payment or less-than-perfect credit. Qualified borrowers with credit scores of 580 or higher may be eligible with as little as 3.5% down. Some lenders may also offer FHA financing for qualified borrowers with credit scores between 550 and 579 with a 10% down payment. FHA loans include mortgage insurance and are subject to FHA requirements, lender guidelines and full underwriting approval.  

VA financing may provide 100% financing for eligible Veterans, active-duty service members and certain surviving spouses.

USDA financing may provide 100% financing for eligible borrowers purchasing qualifying properties, subject to household-income, geographic and other program requirements.

Down-payment-assistance programs may also be available to help eligible buyers with some of the upfront costs associated with purchasing a home.

*Credit-score requirements and loan terms can vary by lender and program. Minimum credit scores, down payments, debt-to-income requirements, loan limits, mortgage insurance, property eligibility and other guidelines are subject to change. Meeting a minimum credit score does not guarantee loan approval.

The important point is simple:

Don't assume you can't buy because you haven't saved 20% down. Find out what options may actually be available to you.

Your Credit Score Can Affect More Than Loan Approval

Credit isn't simply a pass-or-fail test.

Your credit profile can affect:

• The mortgage programs available to you
• Your interest rate and loan pricing
• The cost of private mortgage insurance on many conventional loans
• Potential underwriting requirements
• Your overall monthly housing expense

This is especially important with conventional financing.

Two borrowers purchasing similarly priced homes with similar down payments may have different mortgage insurance costs and loan pricing because their credit profiles are different.

That means qualifying for a mortgage today doesn't necessarily mean you shouldn't work on improving your credit.

Sometimes a relatively short period spent reducing credit-card balances, correcting legitimate credit-report errors or establishing better payment history can put a prospective buyer in a stronger position.

Before assuming your credit isn't good enough—or assuming there's nothing to gain by improving it—let's review the complete picture.

Lenders Qualify on Gross Income. Borrowers Live on Net Income.

This is one of the most important conversations I have with homebuyers.

Lenders qualify on gross income. Borrowers live on net income.

Mortgage underwriting uses established guidelines to determine how much someone may qualify to borrow.

But qualifying for a particular mortgage payment doesn't necessarily mean that payment is comfortable for your lifestyle.

Your actual budget may also include:

• Car payments
• Student loans
• Credit cards
• Childcare
• Groceries
• Health expenses
• Utilities
• Transportation
• Retirement contributions
• Entertainment and travel
• Savings
• Other expenses important to you and your family

The goal shouldn't necessarily be to purchase the most expensive home you can qualify for.

The goal should be to purchase a home with a payment that works within your real-life budget.

Your Housing Expense Is More Than the Mortgage Payment

First-time buyers should also understand what makes up their total monthly housing expense.

Depending on the property and loan, that may include:

Principal and interest + property taxes + homeowners insurance + mortgage insurance + HOA dues, when applicable.

Then there are expenses that aren't part of the mortgage payment at all:

utilities, water, garbage, landscaping, maintenance and repairs.

If the water heater decides it has reached retirement age six months after you buy the house, there is no landlord to call.

That's why I encourage buyers to think beyond simply qualifying for the monthly mortgage payment.

Your Down Payment Isn't the Only Money You'll Need

Another common mistake is focusing entirely on the down payment.

There will be closing costs and prepaid expenses associated with purchasing a home. Some of these costs may be offset with seller credits or lender credits.

And after closing, life continues.

You may have moving expenses, utility deposits, furniture, appliances, window coverings, locks or immediate repairs and improvements.

And ideally, you'll still have money available for emergencies and reserves.

Using every dollar you have just to get the keys isn't necessarily the best way to begin homeownership.

This is another reason why a smaller-down-payment program can sometimes make sense even for a buyer who has more money available.

The right strategy depends on the individual.

Get Pre-Approved Before You Start Seriously Shopping

Prequalification and pre-approval are often used interchangeably, but they aren't necessarily the same thing.

A basic prequalification may rely primarily on information provided by the borrower.

A more complete pre-approval generally involves reviewing documentation relating to income, assets, debts and credit before the buyer makes an offer, although the exact process varies by lender.

For a first-time buyer, getting properly pre-approved can accomplish several things.

It can help you understand:

• Your realistic price range
• Estimated monthly payments
• Approximate cash needed to close
• Which loan programs may fit
• Potential credit issues
• Whether down-payment assistance may be available
• What documentation you'll need
• Whether there are steps you should take before buying

And when you do find the right house, a well-prepared buyer may also present a more credible and competitive offer to a seller.

Getting pre-approved doesn't obligate you to buy a house.

It gives you information.

Your Realtor Matters—Especially on Your First Home

Your mortgage professional helps determine how to finance the purchase.

Your Realtor helps you navigate the property and the transaction itself.

For a first-time buyer, a good Realtor can be invaluable.

They can help you understand comparable sales, evaluate asking prices, structure an offer, negotiate seller concessions where appropriate, coordinate inspections, understand contingencies, monitor contractual deadlines and identify potential issues you may not know to look for.

And sometimes one of the most valuable things a good Realtor can tell you is:

“I don't think this is the right house for you.”

Experience certainly matters, but don't automatically discount a recently licensed Realtor. A newer agent working with strong mentorship and an experienced brokerage may bring tremendous energy, preparation and time to a first-time buyer.

What matters is finding someone who communicates well, understands the local market, represents your interests and is willing to educate you throughout the process.

Your lender and Realtor should also communicate with each other.

Buying your first home is much easier when the professionals helping you are working as a team.

Your First Home Doesn't Have to Be Your Forever Home

Another obstacle for some first-time buyers is comparing every property with their dream home.

Your first home doesn't necessarily need to have everything you eventually want.

For some buyers, the right first purchase might be a smaller single-family home, condo, townhome, older property or a home in a neighboring community.

That doesn't mean compromising on something you shouldn't buy.

It means separating your needs from your wants and considering where this home fits into your longer-term plans.

Homeownership can be a journey rather than a single purchase.

Don't Let the Interest Rate Make the Entire Decision

Interest rates matter.

A change in rate can have a meaningful effect on a monthly mortgage payment and the total amount of interest paid over time.

But the interest rate is only one piece of the decision.

Inventory matters.

Home prices matter.

Competition matters.

Your credit matters.

Your available cash matters.

Your monthly budget matters.

Your employment and income matter.

And most importantly, your readiness matters.

Instead of asking only:

“Is this a good time to buy a house?”

Consider asking:

“Is this a good time for me to buy a house?”

Those are very different questions.

Find Out Where You Stand

You don't need to decide today that you're buying a house.

And you don't need to wait for mortgage rates to reach an arbitrary number before learning what your options are.

A good first step is simply finding out where you stand.

I can review your income, debts, credit, available savings and estimated monthly budget, then help identify mortgage and down-payment options that may fit your circumstances.

If you're ready now, we can work toward a full pre-approval so you know your numbers before you begin seriously shopping.

If you're close but not quite ready, we can identify what may help put you in a stronger position—whether that's improving credit, reducing debt, increasing savings or exploring available assistance and gift-fund options.

And if the numbers show that waiting makes more sense?

I'll tell you that too.

The goal isn't simply to get you to buy a house.

It's to give you the information you need to decide whether buying a home makes sense for you.

Ready to Find Out Where You Stand?

Contact Rob Clark, Home Loan Consultant, to review your options and develop a homebuying plan based on your actual numbers.

Rob Clark | Firestone Financial Group
Home Loan Consultant | NMLS #357788
Firestone Financial Group | NMLS #301522 | CA DRE #01148307
209-227-7745 / 559-476-9279 / rbrtclark53@gmail.com

robertclarkloans.com

Proudly serving the Central Valley and all of California.

Loan programs, interest rates, terms, credit requirements and eligibility guidelines are subject to change without notice. All loans are subject to underwriting approval. This information is for educational purposes and is not a commitment to lend. Equal Housing Lender.