What If Mortgage Rates Don't Go Down

If mortgage rates stay high, the housing market could experience several shifts. For new buyers, affordability would remain a challenge. Higher rates mean more expensive monthly payments, pricing out many first-time buyers, especially those with tighter budgets. Housing demand could slow, leading to fewer sales and potentially stagnating or slightly dropping home prices in some regions.

For buyers who purchased in the past two years hoping to refinance later at lower rates, they could face financial strain. If rates don’t drop, their current payments could remain high, limiting disposable income and savings potential. Refinancing opportunities might be scarce, trapping homeowners in higher-rate loans.

Sellers may also be impacted, as many current homeowners would be reluctant to sell their low-rate homes and take on a new, higher-rate mortgage. This could reduce housing inventory and lead to less market movement.

To prepare, buyers and homeowners should:

Budget cautiously: Don’t overextend, assuming rates will fall soon. Secure a mortgage that’s sustainable even if rates stay high.

Consider fixed-rate loans: Locking in today’s rate protects against future increases.

Save aggressively: High rates mean less room for financial error. Building savings can help mitigate unexpected costs or income loss.

Explore alternative markets: In high-cost areas, consider more affordable locations where payments might remain manageable even with high rates.

In short, creating a plan that you're comfortable with if rates don't come down and maintaining flexibility can help mitigate the uncertainty of persistently high mortgage rates.

To learn more about how we help families and professionals live a low-stress financial life, take a look at our website at leverageadvisory.com , and be sure to follow us on LinkedIn, Instagram, and Facebook for more finance tips you can leverage for your financial future.

To schedule a free consultation you can email [email protected] , or text/call 617-356-1852.