The Hidden Mortgage Rates Myth That Could Cost San Jose Buyers
Timothy Alston | Broker
Aegis Luxury Real Estate · DRE# 01328224
Published
March 26, 2024
Capital of Silicon Valley
Mortgage rates in San Jose have not dropped the way many buyers expected, and the Federal Reserve’s latest decision to hold rates steady has left a lot of people wondering what to do next. The short answer: rates are still expected to come down at some point, but waiting for the perfect moment has its own costs. Here is what the latest data actually means for your situation.
You know how you keep hearing that mortgage rates are about to drop, so you hold off a little longer? And then the announcement comes out and nothing changes, and now you are not sure if you made the right call by waiting? A lot of buyers in San Jose are sitting in exactly that spot right now.
But here is the part most people have not stopped to think about yet: what is waiting actually costing you?
What’s the Latest on Mortgage Rates and the Fed’s Decision?
The Federal Reserve held its Fed Funds Rate steady at its most recent meeting. No cut happened. If you had been counting on that cut to push mortgage rates lower before you made your move, it is worth understanding what that actually means, because the two are connected but not the same thing.
The Fed Funds Rate does not directly set mortgage rates. It influences them. And even Fed Chairman Jerome Powell has indicated that cuts are still planned for this year, assuming inflation continues to cool. His words, paraphrased: if the economy moves in the expected direction, it will likely be appropriate to begin pulling back on rate pressure at some point this year.
Business Insider recently put it plainly: as inflation comes down and the Fed starts lowering rates, mortgage rates should follow. So the expectation is still there. The timing is just not locked in.
Trend #1: Mortgage Rates Are Still Projected to Decline
Most major forecasting organizations still project mortgage rates will ease as the year progresses, contingent on inflation data continuing to moderate. The Fed’s hold was not a reversal of direction. In the San Jose market, even a modest rate reduction of half a percentage point meaningfully changes monthly payment calculations on homes priced at or above the Santa Clara County average.
Trend #2: Timing the Market Has a Track Record Worth Examining
Mark Fleming, Chief Economist at First American, is clear on this: mortgage rate projections are just that, projections, not promises. His advice is direct: never try to time the market. If you are financially prepared and buying aligns with your life goals, waiting for a specific rate could mean missing the home you actually want, at a price point that may not hold.
Trend #3: Inventory in San Jose Remains Competitive
San Jose real estate consistently shows tight inventory relative to buyer demand in the mid-to-upper price tiers. When mortgage rates do drop, the buyers who were waiting on the sidelines tend to re-enter the market simultaneously, which puts upward pressure on listing prices. The question is not just what rates will do, but what property values will do when those buyers return.
Trend #4: The Refinance Option Changes the Calculation
One piece of the equation that buyers sometimes overlook: you are not locked into today’s mortgage rate permanently. If you buy now at current rates and mortgage rates drop meaningfully in the next 12 to 24 months, refinancing becomes a viable path to a lower monthly payment. The equity you build in the interim does not disappear. Have you thought about what that timeline actually looks like in dollar terms for your situation?
Trend #5: The Cost of Waiting Is Rarely Zero
Every month you wait, rent payments leave your account and build equity for someone else. In a market like San Jose homes for sale continue to attract significant buyer interest even at current rate levels, which suggests that local demand fundamentals are not simply waiting for the Fed. What is that monthly rent figure actually costing you over a 24-month wait?
What’s the Real Question You Should Be Asking About Mortgage Rates?
Here is a situation question worth sitting with for a moment. What does your housing situation actually look like right now? Are you renting month to month? Are you locked into a lease that keeps climbing? Have you stopped to calculate what you will have spent on rent by the time mortgage rates hit whatever number you are waiting for?
The latest expert guidance is not to ignore mortgage rates. It is to stop letting them be the only variable in your decision. If your income is stable, your pre-approval is solid, and you have found a home that genuinely fits your life, the rate environment is one factor, not the whole picture.
And if mortgage rates do drop after you close, refinancing is a real option. You are not marrying a rate. You are buying a home.
What would it mean for your family if, three years from now, you had locked in a fixed monthly payment instead of watching your rent climb each year? Can you see how that changes the math, regardless of where rates land in the short term?
What happens if nothing changes in your situation for the next two to three years? If you keep waiting and property values in the San Jose market continue to reflect strong local demand, where does that leave your down payment target and your purchasing power?
Those are not rhetorical questions. They are the ones worth writing down and actually answering.
Based on what many buyers across San Jose are working through right now, the combination of realistic mortgage rate expectations and a clear picture of personal readiness tends to produce better decisions than rate-watching alone. Does that make sense for where you are right now?
If you would like a straightforward look at what the numbers actually mean for your specific situation, Timothy Alston, licensed Broker (DRE# 01328224), is available for a no-pressure conversation. Not a pitch. Just an honest look at where you are and where you want to be. Reach out directly at (408) 207-4593 and let the next step be yours to take.
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Aegis School Excellence Index · 2024-25 performance data
Serving districts: San Jose Unified SD, Alum Rock Union Elementary SD, Berryessa Union SD, Cambrian SD, Campbell Union SD (partial), East Side Union High SD, Evergreen Elementary SD, Franklin-McKinley SD, Luther Burbank SD, Moreland SD, Mount Pleasant SD, Oak Grove SD, Orchard SD, Union SD. School district boundaries can change; please verify current enrollment boundaries and program offerings directly with the school district.
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Broker · DRE# 01328224
Aegis Luxury Real Estate
Harvard Business School Online, Certified Master Negotiation
23+ Years Silicon Valley Real Estate Experience
Retired Military Veteran
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The data relating to real estate for sale on this display comes in part from the Internet Data Exchange program of the MLSListings™ MLS system. Real estate listings held by brokerage firms other than Aegis Luxury Real Estate are marked with the Internet Data Exchange icon and detailed information about them includes the names of the listing brokers and listing agents.
Based on information from the MLSListings MLS as of June 10, 2026. All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy. Properties may or may not be listed by the office/agent presenting the information.
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Aegis Luxury Real Estate · Timothy Alston, Broker, DRE# 01328224 · 10080 N. Wolfe Rd Ste SW3-200, Cupertino CA 95014 · (408) 207-4593
Last updated: July 18, 2026 | Data reflects July 2026 MLS statistics
