We have seen the fastest interest rate increase in history but they have seemed to settle at about 5-6% for now, versus 2.5-3% 9 months ago. Even though every 1% increase is 10% less buying power and affordability has gone down, there’s no need to panic. Interest Rates in the United States averaged 5.42% from 1971 until 2022, reaching an all time high of 20% in March of 1980 and a record low of 0.25% in December of 2008. Therefore we are back at our average.

There are ways to lower your interest rate even in today’s market. 1) Ask for credits from the seller to pay down points. 2) Opt for an ARM instead of a 30 year fixed mortgage. 3) Use cash to pay down principal so you end up paying less interest to the bank.

It’s much better to get a good deal now below asking, with seller credits, and lower the interest rate in the future or pay it off.