Real Estate Right Now:
7% and Rising: Why This 'Scary' Number Might Be the Smartest Time to Buy

Mortgage rates have climbed above 7%, and for many buyers that number can feel like a reason to wait. But the interest rate is only one part of the home buying equation. In this episode of Real Estate Right Now, Jay talks with Paul Fitts, Senior Lending Officer with Advantage Lending, about what today's rates actually mean for buyers.

They discuss buyer competition, seller concessions, affordability, budgeting, mortgage options, and why waiting for a lower rate can come with tradeoffs of its own. The conversation also looks at the difference between reacting to a headline number and understanding the complete financial picture.

If you're considering buying, start by understanding your buying power and the financing options available to you rather than assuming a particular interest rate automatically puts homeownership out of reach.

This Episode's Highlights

Mortgage rates are only one part of affordability. Your price range, debts, savings, and overall budget matter too.

Higher rates can reduce competition, potentially giving buyers more negotiating opportunities.

Understanding your complete monthly budget can be more useful than focusing on the rate alone.

A Higher Rate Doesn't Tell the Whole Story

Today's mortgage rates are higher than the unusually low rates buyers saw during the pandemic, but comparing the rate alone doesn't tell you what it costs to buy a home today.

The episode looks at how buyers can compare their potential payment with the rest of their financial picture. Purchase price, available inventory, seller concessions, down payment, existing debts, and other monthly expenses can all affect affordability.

Before deciding whether to wait, buyers can start by understanding their buying power and talking with a qualified lending professional about their options.

Less Competition Can Change the Buying Experience

Higher mortgage rates can discourage some buyers from entering the market. For buyers who remain active, that can change the competitive landscape.

The episode discusses how buyers may encounter more inventory, price reductions, seller concessions, and lower levels of competition than during the bidding-war environment of recent years.

Depending on the property and circumstances, buyers may be able to negotiate terms such as seller-paid closing costs or other concessions. Understanding the home buying process can help you recognize where those opportunities may exist.

Look at the Whole Financial Picture

One of the most practical conversations in this episode is about affordability beyond the down payment.

Paul explains that buyers should look carefully at their existing monthly obligations. Paying down high monthly debts may sometimes have a greater impact on affordability than putting every available dollar toward a larger down payment.

That calculation is different for every buyer. The right place to start is understanding your complete financial situation and determining what payment fits comfortably within your budget.

Learn more about first-time home buying and the resources available to help you prepare.

Ready to Understand Your Options?

Don't let one number determine whether buying a home is possible for you. Understanding your buying power is a better place to start.