Mortgage rates are back above 7%. Freddie Mac's weekly average for a 30-year fixed loan was 7.32% the week of October 22. A year ago, it was closer to 6.3%.
That's the headline. What it means for you depends on which side of the table you're on. A cash buyer, a buyer who needs a loan, and a seller are each looking at a different market right now. Here's how I'm walking each of them through it.
If You're Buying With Cash
Higher rates thin the field. Fewer buyers can make a monthly payment work at 7%, so the ones who don't need a loan face less competition.
That gives you room to negotiate. Price, repairs, and closing date are all on the table in a way they weren't when every listing drew multiple offers. In September, active listings across the metro were up 9.4% from a year earlier. More homes to choose from and fewer financed buyers is a good combination when you're writing a cash offer.
If You're Buying With a Mortgage
Nobody can promise rates will come down from here. They might. They might also go up. Waiting for the perfect rate means guessing at a number no one controls.
What you can control is the deal you make. With fewer buyers out looking, sellers are more open to helping with costs. In September, 53.8% of sales across the metro included seller-paid concessions, with a median of $7,000. Buyers are putting that money toward closing costs and rate buydowns.
What a Rate Buydown Actually Does
A buydown is money paid up front to lower your interest rate. Often, the seller covers it as a credit at closing. There are two main kinds.
A permanent buydown pays for discount points, which lower your rate for the life of the loan.
A temporary buydown lowers your rate for the first year or two. A 2-1 buydown, for example, drops your rate 2 points in year one and 1 point in year two. Then it settles at your full rate.
Here's what that looks like on paper. On a $300,000 loan at 7.32%, principal and interest come to about $2,061 a month. With a 2-1 buydown, year one drops to about $1,670. Year two is about $1,861. That's roughly $391 a month back in your budget the first year, and $200 the second. Your lender can run the exact numbers for your loan.
If You're Selling
Today's buyers shop by monthly payment first. They want to know what the house costs every month, not just the price on the listing.
That changes how you position your home. Here's one example. On a $300,000 loan, a $7,000 price cut lowers the buyer's payment by about $48 a month. That same $7,000 offered as a credit can cover roughly the cost of a 2-1 buydown, which lowers their payment by about $391 a month in year one. Same money from you. A very different number for the buyer.
Pricing still matters most. In September, homes priced right from day one sold at a median of 100% of their original list price in 14 days. Homes that needed a price cut sold at 93.2% after 91 days. The homes selling well right now have a real strategy behind them from the start.
How Long Homes Are Taking
Across the greater Oklahoma City area, homes are taking around 50 days to sell. That gives buyers time to compare and negotiate. It also means sellers who plan ahead have an edge over sellers who adjust later.
The Right Move Depends on Which One You Are
The rate is the same for everyone. The strategy isn't. If you'd like to talk through your numbers, whether you're buying, selling, or doing both, reach out anytime. I'm happy to sit down and look at it with you.
I'm Angela Cheatwood, Realtor® with Keller Williams Realty Elite, serving Oklahoma City, Yukon, Mustang, Edmond, Tuttle, and Newcastle. Your home is my forte.
