09/19/2026
I can’t take credit for this. I just thought it was very well said. Adam Van De Bovenkamp
“Be fearful when others are greedy, and be greedy when others are fearful.”
— Warren Buffett
Recently we’ve seen mortgage interest rates spike 3/8%, from 6.875% to 7.25%. This places interest rates back to levels we saw during May 2024 and November 2023.
This has now placed many homebuyers on the sidelines—the “wait and see” effect, if you will.
As hesitation grows among potential homebuyers, I wanted to provide some perspective that may be helpful to you and your clients.
On a $400K loan, a full 1% interest rate increase (from 6.25% to 7.25%) only changes the monthly payment by about $266/month. On a $300K loan, that same 1% change is about $200/month.
My aim is not to downplay how this affects homebuyers or their overall purchasing power. However, a common misconception is when people hear a full 1% decrease in rates – the common though is that they’ll save $1,000+ more per month. It doesn’t.
On the other hand, going from a $300K loan to a $400K loan is almost a $700 jump in monthly payment by comparison.
The recent change in rates at these loan amounts has moved monthly payments by around $90/month.
So why do I bring this up?
Just like everything in life, there are tradeoffs.
For those buyers who are willing and able to continue in this rate environment, there may be more opportunity to leverage the situation through seller concessions and price reductions.
Here are a few facts and takeaways that I think may be helpful:
Historically, a 1% increase in mortgage rates has been estimated to price roughly 5 million U.S. households out of certain home-buying scenarios. The inverse can also create a significant increase in potential buyers.
1 in 7 deals is falling out right now (nationally) . A seller who just wasted time in one of these offers will likely have more motivation to negotiate the next go-around.
Over roughly the last 50 years of FHFA national home-price data, U.S. home values appreciated in more than 90% of years. The major exception was the housing crash surrounding the Great Recession.
At the end of the day, ready, willing, and able buyers in this market may have leverage.
We’re talking about:
Fewer bidding wars
More price reductions
Actual room to negotiate
No, an interest rate rise is not exciting—but the opportunities may be.
Rarely will you get the best price and the best interest rate simultaneously.
