Extremely low pandemic mortgage rates near 2% were an outlier caused by a global crisis; historically, 7–8% has been common and people still bought homes. Homebuyers built wealth, started families, and created financial stability despite much higher rates, including the early 1980s when rates exceeded 18%. Interest rates are temporary while home equity endures, so waiting for perfect rates risks higher prices and rents. A rise from 5% to 6.5% can reduce purchasing power—roughly turning a $450,000 budget into about a $385,000 home at the same payment. Strategies include buying points to lower rates and temporary 2-1 or 3-2-1 buydowns.
First things first, let's ditch the panic. Those rock-bottom 2% mortgage rates we saw during the pandemic? That was a unicorn moment. A once-in-a-generation event caused by a global crisis. Historically, mortgage rates around 7% to 8% have been totally normal. And guess what? People still bought homes even when rates were high. People built wealth, started families, and created financial stability, all while paying higher rates than what we're seeing now.
Because smart buyers understood something important: you date the rate, but you marry the house. Rates are temporary. Equity is forever. If you wait for perfect conditions, you could end up watching prices and rents keep climbing while you're stuck on the sidelines. Don't let today's rate make you miss out on tomorrow's opportunity. Let's say you originally budgeted for a $450,000 home when rates were hovering around 5%.
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