On Wednesday the Federal Reserve raised its benchmark rate, and my phone has been busy since. Buyers want to know whether to move now or wait for rates to come down. I am Tyler Lingle, an Indianapolis Realtor with Roots Realty Co.. Here is how I think about it.
The short answer
If you're financially ready and you have a real reason to move, now can be a good time to buy in Indianapolis. That reason might be a job relocation, a bigger home, or a change of school district.
The interest rate is one factor, and it's not the only one. If you're looking only at the rate, this is a tough time to buy. But there's more negotiating room right now than there has been in years, and you can use it.
What just happened with rates
The Fed raised its target range by 25 basis points to 3.75% to 4.00% on September 16. Freddie Mac's 30-year fixed average was 6.95% as of September 17, up from 6.76% the week before and 6.26% a year ago. That's the highest level since January 2025 and the fourth straight weekly increase. Some daily trackers put the average above 7%. One showed 7.063% on September 17.
Freddie Mac's number is a benchmark, not a quote. It reflects borrowers with 20% down and excellent credit. Your rate will depend on your credit, your down payment, and the lender.
Why waiting for lower rates is a gamble
Waiting only pays off if rates actually fall, and nobody knows whether they will. The Fed's September projections put the target range at 4.00% to 4.25% at the end of 2026 and 2027. Markets are pricing in another hike in December. Mortgage rates also follow the bond market more closely than the Fed's overnight rate. That's why the 10-year Treasury yield, near 5% this week, matters so much.
In September 2025 I wrote that mortgage rates follow the bond market, not the Fed overnight rate. In February 2025 I predicted we would end that year near 6.3% to 6.4%. We did. I am not going to pretend I know where 2026 ends. Buy a payment you can handle at today's rate.
If rates do come down later, you may be able to refinance. But refinancing isn't guaranteed, since it depends on your credit, income, and home value at the time. Treat a future refinance as a bonus.
The Indianapolis market: buyers have more leverage
I'd call this a soft seller's market. Homes still sell quickly, but buyers have more choices and more leverage than they've had in years.
- Inventory: Central Indiana had just under 8,000 homes for sale in August, the highest in more than eight years.
- Time to contract: The median was 24 days in August, up 33% from last August.
- Price cuts and concessions: More than half of listings adjusted their price in August, and sellers closed at 4.5% below original list price.
- Prices: They aren't falling. July's regional median sale price of $324,945 was another all-time high, and Tucker's CEO said the added inventory gives buyers greater negotiating power.
That's the opportunity: record prices, but room to negotiate. The live sold-price read by neighborhood is on the areas hub.
Negotiating room is worth real money
Here's the math on a home at the regional median of about $325,000 with 20% down at 6.95%. The principal and interest payment is roughly $1,721 a month. This is my own calculation and excludes taxes and insurance.
- A half-point lower rate (6.45%) saves about $86 a month.
- A 5% lower price (about $16,000) also saves about $86 a month.
In other words, negotiating 5% off the price does about as much for your payment as a half-point drop in rates. And you get it without waiting for anything.
Other tools I use in negotiations every week:
- Price reductions based on the offer and counteroffer.
- Seller-paid closing costs that you can apply toward buying down your rate.
- A 2-1 buydown, paid for by the seller. Your rate is 2 points lower in year one and 1 point lower in year two, then rises to the full rate. On the same example loan, that's about $4,000 in savings in year one and $2,000 in year two. Only use one if you can afford the full payment when it steps up.
Seasonality often matters more than the rate
In my view, the calendar matters more than a quarter-point of interest, unless rates climb to 8% or 9%.
In a Zillow analysis of 2024 sales, 35% of buyers paid over list price in May and June, compared with 24% in January. A Redfin analysis found discounts off asking price typically grow in late summer and peak in early fall, then plateau or shrink heading into winter.
I bought my home in late September for $25,000 under asking. I'd have paid about $25,000 more if I'd bought in May or June. That's one purchase, not a rule, but it fits the pattern.
The fall-through-early-winter window works because sellers are more motivated and there are fewer buyers, so you're less likely to compete for the same home. The trade-off is a thinner selection in winter.
It depends on where you're looking
Hamilton County is still competitive. Homes there sold in a median of 18 days in June, and the year-to-date median price was the highest in the region at $474,900. Expect competition. I break down Carmel, Fishers, and Zionsville separately, and Marion vs Hamilton if you are still picking a side of the county line.
Marion County is closer to a full buyer's market. In my experience, some east side and Center Township neighborhoods have homes sitting 70-plus days. Buyers there have countless options and a lot of room to negotiate.
I am currently selling two homes for less than their 2022 sale prices. That is the Marion County side of this market in one sentence. Hamilton County is still a different conversation.
If you own a home in the city and plan to move to the suburbs, factor in the sell side. Selling in a softer market can be harder, so weigh your buy-side rate and competition against what your current home will realistically sell for. If you need the next house before the current one closes, that is a buy-before-selling problem as much as a rate problem.
Right now, the buyers with an edge are homeowners in Hamilton County who are selling and moving out, and people right-sizing into the city for walkability and amenities. Out-of-state relocation buyers do well too. I'm working with a buyer relocating from the West Coast with a budget between $1 million and $1.5 million. They have plenty of options, less competition, higher days on market, and motivated sellers, and they don't have a home to sell locally.
Buy now if, wait if
Buy now if:
- You have a real reason to move.
- Your budget works at today's rate.
- You want options and time to negotiate instead of rushing.
Wait if:
- The payment only works at a much lower rate.
- You have consumer debt or a thin emergency fund. Dave Ramsey has long said that if you're financially ready, waiting for lower rates isn't a good reason to hold off, but his definition of ready is strict. He wants a fully funded emergency fund of 3 to 6 months and a payment of no more than 25% of take-home pay.
- You need to sell first and your current home is in a slow segment.
If this is your first purchase, start with the first-time buyer guide. If you already own and the question is the other direction, should I sell now or wait is the seller version of this same timing problem.
Questions to ask your lender
The lender you pick and the questions you ask matter. Here's what I coach my buyers to ask:
- What are your refinance costs if rates drop? Do you offer a discount or credit?
- What are the costs of buying the rate down with points?
- Can I use a seller-paid buydown on my loan type?
- What's your rate lock policy?
- What rate and payment would I qualify at, and how does that compare with my comfortable budget?
The process I use, including a Roots-vetted lender list, is on how it works.
Thinking about making a move?
The right answer depends on your finances, your timeline, and the part of town you're targeting. Book a 15-minute conversation and I will help you run the numbers, pick a lender, and build a negotiation strategy.
This is general information, not financial advice. Talk to a lender about your situation. Tyler Lingle is the co-founder and broker of Roots Realty Co., an Indianapolis real estate brokerage.