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The average U.S. rate for a 30-year fixed mortgage reached a 20-year high of 7.08% in the final week of October, more than doubling from a year earlier, according to Freddie Mac (FMCC).

Homebuyers aren’t happy.

On a $350,000 home loan, a mortgage payment is now an additional $927 per month compared to late 2021.

In an ironic twist, home shoppers now have a good chance of getting an accepted offer on a home they love – if they could afford it. Gone are widespread bidding wars that pushed home prices to record gains last year.

While housing inventory nationwide is still low, places like Phoenix now have active listing numbers not seen since April 2019 and four times March 2022 levels. And active listings in Boise, Idaho, a pandemic hot spot, are at six-year highs.

 

Sure, homebuyers can capture a home, but at today’s stratospheric rates, should they?

» Expert Tip:Looking to buy soon? Set yourself up for having your offer accepted on a home by getting preapproved for a mortgage prior to your home search.

What Does “Marry the House, Date the Rate” Mean?

“Marry the house, date the rate” suggests that someone should buy a house at whatever mortgage rate is available with plans to refinance later.

After all, says the mantra, the house and how you finance it are two different things. The loan is replaceable – the home is what is important.

Besides, people refinance all the time, the theory goes.

Booking.com

The National Association of Realtors reports that the average amount of time in a home is 13.2 years. But people aren’t married to their mortgages like they are their homes. A mortgage is as replaceable as that blind date you went on just to be nice.

During the Covid-19 pandemic, 42% of homeowners age 25 to 40 refinanced, says a LendingTree study.

But that was then, when rates were at or near historic lows. Will refinance-favorable conditions ever return?

 

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