Mortgage Rates Are Higher—So Why Are Buyers Still Buying?

If you’ve been thinking about buying a home but have been watching mortgage rates climb, you may be asking:

Are mortgage rates too high to buy a house right now?

Not necessarily.

Higher mortgage rates have changed the way buyers need to approach the market, but they haven’t eliminated opportunities. In fact, today’s buyers may have something they haven’t had much of in recent years: more homes to choose from and more room to negotiate.

Mortgage rates moved significantly higher in September, with the 30-year fixed rate reaching 7.45% on September 24 according to Mortgage News Daily. At the same time, national housing inventory reached approximately 1.62 million homes for sale - the highest level since November 2019.
So, instead of asking only, "What is today’s mortgage rate?", buyers should also be asking:

"What can I negotiate, and what loan strategies could make the payment work for me?"

Are Buyers Still Buying Homes When Mortgage Rates Are Above 7%?

Yes.

A mortgage rate is only one part of the home-buying equation. Buyers also need to consider the purchase price, seller concessions, closing costs, down payment, monthly payment and their long-term plans.

Today’s market may provide opportunities that weren’t as common when inventory was extremely limited.

More inventory can mean:

• More homes to choose from
• Less competition between buyers
• More time to make a decision
• More opportunity to negotiate with sellers
• Potential seller-paid closing costs
• Potential seller-funded interest-rate buydowns

NAR’s chief economist has noted that increased housing supply is giving buyers better opportunities to negotiate.

That means the rate you’re quoted isn’t necessarily the whole story.

How Can Buyers Negotiate a Lower Mortgage Payment?

One strategy is asking the seller to contribute toward a temporary mortgage rate buydown.

A temporary rate buydown reduces the buyer’s interest rate for the first one, two or three years of the mortgage. The cost is generally paid upfront by the seller through a negotiated concession.

What Is a 3-2-1 Rate Buydown?

A 3-2-1 buydown temporarily reduces the interest rate by 3% in the first year, 2% in the second year and 1% in the third year.

For example, if the note rate is 7.25%, the payment could be based on:

• Year 1: 4.25%
• Year 2: 5.25%
• Year 3: 6.25%
• Year 4 and beyond: 7.25%

The seller generally pays the cost of the buydown through a concession negotiated as part of the purchase agreement.

This can give a buyer a lower initial payment while they adjust to homeownership expenses.

What Happens to a Temporary Buydown if You Refinance?

One important detail buyers should understand is what happens if they refinance during the temporary buydown period.

If the loan is refinanced before the buydown period ends, the unused funds in the buydown escrow are not simply lost. They can be applied toward the loan balance.

A temporary buydown isn’t right for every buyer, so it’s important to compare the numbers and understand the long-term payment.

What Is an Assumable Mortgage?

An assumable mortgage allows a qualified buyer to take over the seller’s existing mortgage, including the existing interest rate and remaining loan terms.

Certain FHA and VA loans are assumable.

Can You Assume Someone Else’s Low Mortgage Rate?

Potentially, yes.

If a seller has an FHA or VA mortgage with an interest rate significantly below today’s market rates, an eligible buyer may be able to assume that loan.

However, there’s an important catch.

The seller’s mortgage balance may be much lower than the home’s purchase price. The buyer has to cover that difference, which may involve a larger down payment or additional financing.

So an assumable mortgage isn’t simply a matter of taking over someone’s low rate. The entire financial picture needs to be evaluated.

What If I Already Own a Home With a Low Mortgage Rate?

If you’re a homeowner with a very low first mortgage rate, you may not want to refinance just to access your home’s equity.

That’s where a HELOC or home equity loan may be worth exploring.

A HELOC is generally a revolving line of credit with a variable rate. A home equity loan provides a lump sum with a fixed rate and payment.

Homeowners may use home equity for:

• Home improvements
• Debt consolidation
• Large expenses
• Investment opportunities
• Other financial needs

The potential advantage is that you may be able to access your home’s equity without refinancing your existing first mortgage.

Is Fall 2026 a Good Time to Buy a House?

There isn’t one answer that applies to every buyer.

What we do know is that the market has changed.

Housing inventory is higher, buyers have more choices and sellers may have more incentive to negotiate. At the same time, mortgage rates remain an important part of affordability.

That’s why I don’t think buyers should make a decision based solely on the headline mortgage rate.

Instead, look at the complete picture:

Purchase price + interest rate + seller concessions + loan program + cash needed + monthly payment + your long-term plans.

A higher mortgage rate doesn’t automatically mean you can’t buy a home. It may simply mean you need to approach the purchase differently.

What Should Homebuyers Do Before Making an Offer?

Before you start shopping - or before you make an offer - talk with your mortgage professional about more than just the interest rate.

Ask:

1. What will my actual monthly payment be?
2. How much cash will I need to close?
3. Could the seller contribute toward my closing costs?
4. Would a temporary rate buydown make sense for me?
5. Does the property have an assumable FHA or VA loan?
6. Which loan programs could fit my situation?
7. What happens to my payment after a temporary buydown ends?
8. What would my payment look like if mortgage rates improve and I refinance later?

The goal isn’t to find one “perfect” mortgage.

The goal is to understand your options so you can make an informed decision.

The Bottom Line for Homebuyers

Are mortgage rates higher than they were a year ago? Yes.

Does that mean buyers should automatically wait? Not necessarily.

Today’s buyers may have more inventory, more negotiating power and more financing strategies available to them.

A seller-paid rate buydown, an assumable mortgage or other financing options could potentially change the numbers significantly.

The right strategy depends on your income, credit, down payment, goals, the property you’re buying and the terms you can negotiate.

If you’ve been sitting on the sidelines because of mortgage rates, let’s look at the numbers instead of making assumptions.

You don’t have to decide today whether you’re buying a house.

Let’s just figure out what buying a house would actually look like for you.