With mortgage rates still hovering above 7%, I know many of you are keeping a close eye on both affordability and opportunity. Recent trends have shown that as Treasury yields rise and the Fed signals possible further moves, it’s wise to plan for potential changes in borrowing costs. A useful strategy I’ve seen clients use—especially when approaching unique loan types like VA, jumbo, or self-employed scenarios—is to build a rate cushion into your planning: consider what your budget would look like if rates ticked up by half a point in the next three months, three-quarters within six, and even a full point in a year.
Interestingly, data shows that buyers who entered the market later in the year often found more leverage—homes were about 5% less expensive in early Q4 compared to late Q2, with fewer competing offers and more time to negotiate. Last month’s ~5-month housing supply also tipped the scales toward buyers, giving more room to negotiate on price, closing costs, discount points, or even temporary rate buydowns.
For those of you still weighing your options, the market continues to anticipate more Fed tightening. But the broader goal is to tame inflation, which could eventually help ease mortgage costs. Whether you’re a first-time buyer needing guidance, an investor looking for flexibility, or navigating a complex loan scenario, understanding these shifts can help you move forward with confidence.
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