For years, the lending and real estate industries have tossed around a catchy mantra: “Date the rate, marry the house.” The idea is that you shouldn’t let today’s higher mortgage rates stop you from buying the home you want. After all, someday, you can refinance when rates drop.
But according to the Truework 2025 Recent Homebuyer Report, that approach is turning into a risky financial bet, particularly for younger buyers who may be counting too heavily on a refinance “safety net.” Truework, a platform that verifies borrowers’ income and employment, conducted a national survey of 1,000 recent home buyers and found that nearly two-thirds of Gen Z buyers (64%) and millennial buyers (65%) said refinancing to a lower rate is important to their financial health—double the share of baby boomers (32%).
“Younger buyers are betting their financial future on the hope that interest rates will drop significantly enough to make refinancing viable,” says Ethan Winchell, co-founder and president of Truework.
Yet forecasts show no major rate drops ahead. Mortgage rates have stayed in the mid- to high-6% range over the last year. The National Association of REALTORS® projects average rates of 6.7% in 2025 and 6% in 2026, barring any major action from the Federal Reserve.
Mortgage expert Todd Carson explains why this reliance on refinancing is risky. “The obvious danger is that rates don’t drop,” says Carson, director of sales performance for Planet Home Lending in San Francisco. “[Buyers] need to understand that a future refinance is not automatic. Life can happen. Circumstances could change that might affect qualifying—personally or in the market. As the proverb says, ‘nothing in life is guaranteed.’”
Why So Many Are Depending on It
The Truework report warns of a growing “refinancing dependency crisis” or “refinancing time bomb” that could even trigger future defaults if the trend continues. Unlike past generations who expected to keep their original mortgage, many younger buyers are essentially betting their financial stability on the hope that the Fed will eventually lower rates, the report cautions.
Carson says the trend is fueled by financial pressure and inexperience. Many Gen Z and millennial first-time buyers feel squeezed by record-high home prices and elevated mortgage rates. They may also be holding out for the rock-bottom 2%–3% rates of 2020–2021 to return. But “2020–2021 was a perfect storm for low rates, mainly due to historically low Fed rates and quantitative easing,” he says. “Waiting for those exact conditions again could mean waiting forever.”
The Truework report also points to an information gap: Today’s buyers have constant access to real-time data and financial advice online, but often without context. “These are buyers raised on scrolling Zillow listings for fun, and now they’re getting mortgage advice through TikTok and YouTube,” the report notes. That combination of information overload and lack of depth could leave some overconfident in taking on riskier strategies.
This knowledge gap also can show up in loan choices made without fully assessing potential risks. Truework found that 11% of the 1,000 buyers surveyed admitted they don’t fully understand key mortgage terms. That’s especially true among younger buyers. That lack of knowledge may be pushing more borrowers toward adjustable-rate mortgages and temporary buydowns, which offer short-term relief but can carry long-term risks to unprepared borrowers. If rates don’t fall as expected, ARMs can reset sharply higher, straining borrowers’ finances. Earlier this month, ARM applications jumped 25% to their highest level since 2022, now making up nearly 10% of all mortgage applications, according to the Mortgage Bankers Association.
Source: Truework 2025 Recent Homebuyer Report
The False Refi Safety Net
The report cautions that refinancing isn’t always a guarantee. Qualification requirements can change, and Carson outlines three common obstacles that could derail future refinancing plans:
- Negative changes to credit
- Reduced income
- Falling home values
“I’ve consulted borrowers who assume that just because they have a mortgage now, they can automatically refi,” Carson says. “But maybe a spouse stopped working, they became self-employed, or [they] developed credit issues. Any of these can block a successful refinance.”
Plus, financial advisers warn that refinancing doesn’t always make financial sense. They say it usually only makes sense if you can lower your rate by at least one percentage point, due to the costs of closing fees in a refi.
A Safer Approach to Bank on the Future
Carson stresses one simple rule: Buyers must be comfortable with their mortgage payments now. “If a refi materializes later, great,” he says. “But if your financial stability depends on it, you could be setting yourself up for serious trouble.”
He urges agents to guide buyers with awareness messages like:
- Don’t overextend yourself. “What you qualify for [on a mortgage] and what you’re comfortable with are probably different amounts,” Carson says. Buyers should consider their day-to-day lifestyle, not just approval numbers, he notes—and not just hope for a future refinance for relief.
- Consider the full scope of homeownership costs. Before you commit to a purchase, go beyond mortgage principal and interest costs, and factor in utilities, HOA fees, insurance and other monthly costs.
- Move beyond online information and calculators. Have early conversations with lenders so you have a full financial picture before house-hunting.
- Go in financially prepared. Respondents to the Truework survey listed “budgeting for unexpected expenses and repairs” as their top financial hurdle. Your buyer clients need to be prepared for the expected, such as closing and moving costs, and the unexpected, such as last-minute repairs. They also need to have an emergency cushion in place.
“Buying a home can be very emotional,” Carson says, “but it’s crucial to understand your personal budget … and then stick to it.”
