Last week, my neighbor Donna — she’s been wanting to move closer to her grandkids in Pflugerville for about two years now — leaned over the fence and asked me whether she should just hold off until rates come down. She’d read something about the Fed meeting. She figured rates were about to drop.

I told her what I’m going to tell you: the jobs report that came out recently changed the math in ways most buyers aren’t tracking. And not in the direction Donna was hoping for.

What the Jobs Report Actually Did

Here’s the short version. The Fed has been watching two things very closely: inflation and the labor market. When the labor market is strong — meaning job growth is solid, unemployment is holding low — the Fed has less reason to cut rates. Cutting too soon with a still-humming economy risks stoking inflation again, and they’ve said so, repeatedly, in plain language.

The most recent jobs report came in stronger than economists expected. Depending on which analyst you read, payrolls grew somewhere around 170,000 to 190,000 — give or take revisions that tend to dribble in a month later — and the unemployment rate either held flat or ticked down slightly. That’s not a struggling labor market. That’s a labor market giving the Fed permission to be patient.

Patient, in Fed-speak, means: don’t hold your breath for a rate cut.

I’ve written before about why mortgage rates often don’t move the way buyers expect even when the Fed does hold steady — that piece gets into the 10-year Treasury relationship and why the two don’t move in lockstep the way people assume. If you haven’t read it, it’s worth ten minutes of your time: Why Mortgage Rates Won’t Drop Even When the Fed Holds.

What “Waiting” Actually Costs in the Austin Market

Here’s the thing about waiting for rates to drop: everyone else is waiting too.

Right now, in the neighborhoods I know best — East Austin, the Mueller area, parts of the 78723 zip — inventory is still thin relative to what it was in, say, 2018. Properties that are priced correctly and in decent shape are not sitting. I’ve watched a house on Lyons Avenue go pending in under two weeks, and a gut-renovated bungalow near the airport corridor that had two offers inside of ten days.

The assumption behind “I’ll wait for a 5-percent rate” is that prices stay flat while you wait. That hasn’t been this market’s pattern. The Austin metro had a painful correction from its 2022 peak — real, meaningful price drops in some submarkets — but the floor seems to have been found in most neighborhoods. If rates drop meaningfully, demand floods back. Prices respond.

That’s not a guarantee. It’s a pattern I’ve personally watched play out across three Texas markets over about twenty years of buying, selling, and renovating.

Some rough numbers to make this concrete, as of fairly recently:

  • Median sale price in East Austin: somewhere around $575,000–$625,000, depending on the block and the condition
  • Average days on market for move-in-ready homes in that range: roughly 18–30 days, though that number shifts
  • Current 30-year conventional rates: hovering in the high 6s to low 7s as of the time I’m writing this — they’ve been stubbornly sticky

That last number is the one Donna was waiting to see fall. And it might. Eventually. But the jobs report told us it probably won’t be this quarter.

The Practical Problem With “Waiting for Rates”

Waiting for rates is a strategy that requires you to correctly predict two things: when rates will fall, and what prices will do in the meantime. Even professional economists can’t do that reliably. I’ve been in enough closing rooms to know that.

What buyers can actually control:

  1. Their offer structure. A well-structured offer with a solid option period and good earnest money tends to win in this market even without the highest number. Can a seller deny an inspection until earnest money and option fee is deposited? — worth knowing before you’re in the middle of a negotiation.
  2. Whether they buy down their rate. Temporary and permanent buydowns are real tools. A 2-1 buydown doesn’t fix a 7% rate permanently, but it buys time if you genuinely believe rates will shift in two years.
  3. Their loan type. Not every buyer has looked hard at whether an ARM makes sense for their timeline. I’m not recommending one — that’s between you and your lender — but the conversation is worth having out loud.
  4. The house itself. Buying a structurally sound home with good bones in a neighborhood that has held value gives you more flexibility than chasing the trendiest block. I wouldn’t buy on a flood-prone stretch near Walnut Creek without a very long conversation about elevation certificates and insurance costs, regardless of the rate environment.

What I’d Actually Tell Donna

I told her to stop watching the Fed meeting calendar like it’s a countdown clock. The jobs report doesn’t kill her plan — it just means the timing she had in her head probably needs to shift by a few months, maybe longer.

What I’d actually suggest she do, and what I’d say to anyone in her position:

Get pre-approved now. Not when rates drop. Now. Understand your real number — what your payment looks like at current rates — and decide if that payment works for your life. If it does, you’re already a buyer. If it genuinely doesn’t, then you’re not waiting for rates; you’re waiting for your financial situation to change, which is a different and more honest problem to solve.

Also — and this is the fence-conversation truth — if you refinance in three years when rates have dropped, you’ll have three years of equity built and three years of payments not going to a landlord. The math on waiting is almost never as clean as it sounds when you’re leaning over a fence hoping for good news.