High Rates, Low Stress: How Smart Buyers Are Still Getting a Deal

The 30-year mortgage rate jumped to 7.19% from 6.71% in four weeks. This is true, but don’t let it scare you. 

Just because rates are high doesn’t mean buyers can’t get a good deal on a home. As we know, inventory is up and the amount of offers is down - this is causing listings to drop their prices and sellers are offering more concessions. A great concession buyers agents should be asking for: rate buydowns. 

What is a rate buydown?

This is when a seller uses a portion of their sale proceeds to lower the buyers interest rate. It is a seller's concession that can make purchasing a property more attractive, lower a buyer’s monthly payment, and help close the deal without cutting the home's listing price (if it hasn’t dropped already.) 

Temporary buydowns, such as 2-1 buydown, are often most common. Here’s how they work:

Year 1: The interest rate is reduced by 2%. If market rates are 7%, the buyer pays as if it were 5%

Year 2: The interest rate is reduced by 1%. The buyer pays as if it were 6%.

Year 3-30: The buydown expires and the buyer pays the full 7%.

So yes, while rates may be up - that doesn’t mean opportunity has dropped.

Metro inventory is up 7.9% YoY to 11,698 listings, giving buyers more room to shop and negotiate. The steadier approach as a buyer: get pre-approved against today’s numbers, use the extra inventory to find the right home, and revisit financing later if rates ease.

Want to talk about your strategy as a buyer? Let’s chat!