Katherine and Steven Wolf are no strangers to the financial consequences of home ownership in today’s challenging market. Katherine, a speech therapist, now finds herself working weekends, resulting in less time with their two children.

The couple missed out on the low-interest mortgage rates at the beginning of the pandemic. By the time they stabilized their jobs and were ready to buy a home, interest rates had already doubled. Determined to make a move, they purchased a single-family home in Bakersfield in the fall of 2022, partially motivated by a loan broker’s claim that rates would drop in 2023. They wanted a yard for their kids to play in, but now monthly payments are leaving them feeling financially strained.

Initially hopeful that interest rates would decline within a year, Steven had planned to refinance and save hundreds each month. However, rates have continued to rise instead of falling. The 37-year-old English teacher reflects on their expectations, “We thought we’d just have to hold on for a few months, but it’s looking like rates won’t decrease anytime soon.”

The Wolves’ situation is not unique; many Americans sold their homes during the rise in rates due to real estate agents and mortgage brokers assuring them that rates would soon drop. If the rates do fall, their plans might still come to fruition, but if high rates persist, remorse will grow. For agents and brokers, they earn commissions with both purchases and sales, regardless of the market conditions.

Some families have taken on second jobs, accessed retirement savings, or are actively selling their homes. Thirty-five-year-old tech professional Chelsea Bolinger recalls the troubling decision to buy her home: “It was a painful memory, all because the loan company kept insisting rates would drop.”

Back to the Wolves’ current predicament, Steven shared that after buying their home for $420,000, their monthly housing costs increased by $1,500 compared to renting. Unable to refinance to lower their payments, Steven has started picking up additional shifts at work. Katherine now has to work weekends too, which means less time with their children.

Theoretically, high rates and low demand should mean fewer buyers and potentially decreasing home prices. However, if rates were to fall, competition could become fierce. The downside remains the high monthly payments unless rates drop significantly and refinancing goes smoothly. It’s no wonder some people say, “Marry the house, date the rate.”

The costs associated with refinancing are substantial, often ranging into the thousands just for fees and closing costs. Homeowners need to carefully calculate whether the savings in monthly payments justify the expense of refinancing.

According to Holden Lewis, a mortgage expert at NerdWallet, refinancing is only worthwhile if interest rates drop by at least 0.75% from when the mortgage was obtained. As of now, the 30-year mortgage rate stands at 6.9%, and the Mortgage Bankers Association projects it might dip to 5.9% by the fourth quarter of 2025.

Furthermore, there’s no guarantee that a drop in rates will lead to reduced monthly payments. If missed payments have negatively impacted credit scores, new mortgage payments could actually be higher. Some lenders promote offers like “Buy now, refinance later,” but Holden Lewis cautions that these deals can come with inflated interest rates and fees, emphasizing the importance of comparing options.

On the other hand, some buyers have no regrets about purchasing during high-rate periods. Amy Ramirez and her wife Noelle recently bought a four-bedroom home in Rancho Cucamonga, complete with a pool and stunning mountain views. They sold their home in the greater Los Angeles area and are financially comfortable, enjoying more space.

Amy didn’t buy based on expectations of falling rates. Instead, she viewed it as a strategic move—buying now to avoid competition when rates eventually drop. They also operate a s’more shop in West Covina, making the location convenient.

While signs of a market crash like the one in the 2000s aren’t visible yet, the persistent high rates could lead to increased foreclosures, ultimately affecting home prices. Thankfully, prices continue to rise, providing struggling homeowners opportunities to sell. Following the subprime mortgage crisis, banks have tightened lending standards, and if homeowners struggle to make payments, lenders are more willing to work with them to avoid foreclosures, mitigating potential risks.

Laurie Goodman, head of the Housing Finance Policy Center at the Urban Institute, believes we won’t see a repeat of the disastrous cycle of the early 2000s, predicting that foreclosure rates will remain manageable.

Reflecting on what he has learned, Steven emphasizes the importance of getting advice from unbiased third parties when buying a home. He feels misled by mortgage brokers who assured him rates would drop below 6%, something he now realizes he should have been wary of, “I’m not a financial expert; I’m just an English teacher.”

Meanwhile, Steven’s lender, PrimeLending, assures that they assess a borrower’s capacity to repay and don’t guarantee fluctuations in loan costs. “The mortgage market changes rapidly. We provide current information and professional analysis, but this is not a guarantee,” they state.

Looking to the future, Steven mentions a potential move to Baltimore, Maryland, if a new job comes through. With rental income possibly being less than their mortgage payments, they’ve begun the selling process, without any expectations of recouping their initial investment.

Just days later, Steven communicated that his mortgage broker suggested he jump on another home purchase in Baltimore immediately to avoid competing pressure once interest rates drop. He replied, “The broker assures us they’ll still finance us.”