The buyer who backs out at 7.3%.
Most buyers who walk this fall won’t be priced out. They’ll be scared out.
This week's take
The payment went up $67. The fear went up a lot more.
Six straight weeks of rising rates will do something to a buyer under contract. Freddie Mac put the 30-year fixed at 7.28% on Thursday, the highest since November 2023. The headlines wrote themselves.
Here's what the headlines leave out. On a $300,000 loan, the move from 6.95% three weeks ago to 7.28% today is about $67 a month. That's real money. For a buyer who was approved with room to spare, it's usually not deal-breaking money.
Back when I was selling, the deals I lost in a rate spike almost never died on the math. They died on the phone call nobody made. The buyer read a scary article Tuesday night, talked to a brother-in-law Wednesday, and by Thursday the agent got a text that started with "We've been thinking."
The fix isn't talking anybody into anything. It's getting the real number in front of the buyer before the headline gets there first.
Buyers don't walk away from $67. They walk away from not knowing.
What 7.28% actually costs
The week in rates
On a $300,000 loan
A year ago at 6.34%: $1,865 a month, principal and interest. Three weeks ago at 6.95%: $1,986. Today at 7.28%: $2,053.
That's $67 more than three weeks ago and $188 more than last fall. Taxes and insurance don't move with the rate, so the share of the total payment that changed is smaller than it feels. In the Capital Region, where property taxes are a big piece of every payment, that matters.
Where it actually bites
Debt-to-income. For most approved buyers, $67 doesn't move the needle. For the buyer who was approved right at the edge, it can. You want to find that out this week, not the week of clear-to-close.
The levers that still work
A seller credit toward a temporary or permanent buydown. Discount points. An adjustable-rate option for buyers who don't plan to stay 30 years. Not every lever fits every buyer, but a buyer who hears about them early has choices. A buyer who hears about them at closing has a problem.
What to do with it this week
For realtors
Call your under-contract buyers before they call you.
Every buyer you have under contract or in attorney approval saw the same headline. Call them Monday with their updated payment in hand. Then ask the lender, not the buyer, whether the rate is locked and when the lock expires.
For buyers
Look at the payment, not the rate.
Ask your lender for the updated monthly number, all in. If it still fits the budget you set when you started looking, the house didn't change. Only the news did. If it doesn't fit, say so now, while there are still options on the table.
For sellers
A credit can save a deal a price cut won't.
If your buyer gets shaky, a credit toward a rate buydown often lowers their monthly payment more than the same dollars off the price. Have the buyer's lender run both before anyone renegotiates.
Penny's Corner
Words of wisdom, from under Dad's desk
Dad says buyers get scared of numbers they don't understand. I don't understand any numbers, and I'm not scared of anything except the vacuum. Then again, nobody has ever asked me to sign a contract.
From the closing table
Deals that hold together when rates move aren't an accident. These are the people who lived it, in their own words, from Google, Zillow, Facebook and Experience.com.
One move this week
Send the payment, not the rate.
Before Monday ends, text every buyer you have under contract. One message, with their real number in it.
"Rates moved this week, so I had your lender rerun it. Your payment is about $[X] more a month than when we wrote the offer. Want to talk it through, or are we good?"
Most will write back "we're good." The one who doesn't is the deal you just saved.
Got a buyer getting nervous? Send me the scenario. I'll tell you honestly whether it's a payment problem or a headline problem.
Brian Marchand
