Category: Interest Rates (Page 1 of 35)

Home Prices Just Ticked Down for the First Time in 3 Years. Is Fall Still a Window?

November 2, 2026 / Tom Bonetto / 0 Comments

For the first time in more than three years, U.S. home prices have recorded a year-over-year decline.

For prospective homebuyers who have been waiting on the sidelines, this could be an encouraging development.

The decline comes as mortgage rates remain elevated, buyer demand weakens, and sellers face a housing market that looks very different from the bidding wars of just a few years ago.

Home Prices Are Finally Showing Signs of Weakness

According to an October 29 report from Redfin, the median home-sale price fell to $389,601, down 0.1% from a year earlier. That may not sound like much, but it’s a meaningful shift after years of steadily rising home prices.

But let’s keep things in perspective. A 0.1% decline doesn’t mean home values are suddenly collapsing, nor does it mean every market is experiencing falling prices. In fact, Redfin’s separate Home Price Index showed prices still increasing in September.

However, the latest weekly sales data suggests that the balance of power may be shifting. The bigger story isn’t necessarily that home prices are falling. It’s that buyers are gaining negotiating leverage they haven’t enjoyed in years.

And as we head deeper into the fall season, that leverage could translate into some meaningful opportunities.

Rising Inventory Is Giving Buyers More Choices

One of the most important developments in today’s housing market is the growing number of homes available for sale. Redfin reports that active listings increased 2.2% compared with a year earlier, with approximately 1.51 million homes on the market nationally.

Meanwhile, pending home sales have fallen sharply, declining nearly 16% year over year. With fewer buyers competing for available properties, homes are taking longer to sell.

The typical home now spends approximately 50 days on the market, and more than 21% of sellers have reduced their asking prices. Those are encouraging numbers for buyers who remember when homes were selling within days, often with multiple offers.

This is particularly interesting because fall has traditionally been a slower season for real estate. Families with school-age children have generally completed their moves, the spring and summer buying rush is over, and some sellers become increasingly motivated to complete a transaction before the holidays or year-end.

A home that’s been sitting on the market for 60 or 90 days may present a very different negotiating opportunity than one that was listed yesterday. Sellers who need to relocate, have already purchased another property, or simply want to move on may be more willing to consider offers they would have rejected earlier in the year.

Of course, local conditions matter enormously, but buyers willing to do their homework may find some excellent opportunities.

The Best Negotiation May Not Be a Lower Price

Here’s something I frequently discuss with my mortgage clients: Negotiating a lower purchase price isn’t always the smartest financial move. Sometimes, asking the seller to contribute toward your closing costs or a mortgage rate buydown can provide a greater immediate financial benefit.

For example, imagine purchasing a $450,000 home. Rather than negotiating a $10,000 reduction in the purchase price, you might ask the seller for a $10,000 closing-cost credit. Depending on your loan program and financing structure, those funds could potentially cover much of your closing costs, reduce the cash you need at closing, or help you obtain a lower mortgage interest rate.

A $10,000 price reduction on a 30-year mortgage might save only about $60 per month, depending on the down payment and interest rate. A well-structured seller concession could provide considerably more immediate value.

There are other negotiating opportunities worth exploring, too. Buyers can request repairs following a home inspection, negotiate for appliances or other personal property, ask for a home warranty, or seek flexibility with closing dates.

And don’t overlook new construction! Builders with completed inventory may be particularly motivated to offer incentives, including closing-cost assistance, upgrades, and mortgage rate buydowns. The key is understanding which concessions deliver the greatest financial benefit for your particular circumstances.

An experienced real estate agent working alongside a knowledgeable mortgage professional can help you evaluate those options before you submit an offer.

Should You Buy This Fall or Wait for Better Conditions?

That’s the question many prospective homebuyers are asking, especially with mortgage rates remaining stubbornly high.

According to Redfin’s latest report, the average weekly mortgage rate was approximately 7.32%, and the typical buyer’s monthly mortgage payment was $2,786. Affordability remains a genuine challenge, and there’s no guarantee that rates or home prices will decline significantly in the coming months.

But consider the other side of the equation: if mortgage rates eventually fall enough to bring more buyers back into the market, today’s negotiating advantages could disappear.

More competition could mean fewer seller concessions, fewer price reductions, and potentially higher purchase prices. The ideal buying opportunity isn’t necessarily when mortgage rates are at their lowest. It may be when you can negotiate the best overall financial arrangement.

My advice is to focus less on trying to predict the perfect moment to buy and more on determining whether today’s market can work to your advantage.

If you find the right home, can comfortably afford the payment, and negotiate favorable terms, buying this fall could make excellent financial sense. And if mortgage rates improve in the future, refinancing may provide an opportunity to reduce your payment further, although refinancing is never guaranteed.

In Conclusion

As The Lending Coach, my job isn’t simply to help you obtain a mortgage. It’s to help you understand your options, structure your financing intelligently, and make decisions that support your long-term financial goals.

If you’re considering purchasing a home this fall, let’s talk about how we can use today’s changing housing market to your advantage.

Whether you’re purchasing your first home, moving into another property, or looking to expand your real estate investment portfolio, I can help you evaluate the numbers and identify the financing strategy that makes the most sense.

And sometimes, the right mortgage strategy can help turn a challenging real estate market into a valuable opportunity.

Reach out to me directly—I’d be happy to go over the specifics to help you figure out the best plan of action.

As always, you can set up an appointment with me here…

The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Starlight Mortgage. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deductions.

What Happens If Mortgage Rates Fall After You Buy?

October 19, 2026 / Tom Bonetto

One of the biggest questions I hear from homebuyers is, “What if I buy a home now and mortgage rates drop six months or a year later?” It’s a great question, and one that deserves a thoughtful answer.

After all, nobody wants to feel like they missed out on a better mortgage rate.

Here’s the good news: Your mortgage doesn’t have to be permanent just because your home purchase is. If rates decline, refinancing may give you an opportunity to lower your monthly payment.

Remember the old adage…Marry the House, but Date the Rate!

Unlock your home’s equity today and capture lower interest rates tomorrow through smart refinancing…and the key is knowing when the savings are worth the cost.

How Refinancing Can Save You Money

Refinancing replaces your existing mortgage with a new loan, potentially at a lower interest rate. Depending on your financial situation, you could reduce your monthly payment, pay less interest over time, or change your loan term.

For example, imagine you buy a home with a $400,000 mortgage at a 7% interest rate. Your principal and interest payment would be approximately $2,661 per month.

If rates later fall to 6%, refinancing the same $400,000 balance into a new 30 year fixed rate mortgage could reduce that payment to approximately $2,398 per month.

That is a potential savings of about $263 per month, or $3,156 annually.

These estimates assume the same loan balance and a new 30 year term. They exclude taxes, insurance, closing costs, and other fees. Your actual savings will depend on your remaining balance and refinancing terms.

When Does Refinancing Make Sense?

A lower interest rate does not automatically mean refinancing is the right move. You also need to consider the costs of getting the new loan.

Here are the main factors to evaluate:

Closing costs: Refinancing can involve appraisal fees, lender charges, title services, and other expenses. Get a written estimate before making a decision.

Monthly savings: Compare your current principal and interest payment with the proposed new payment. Make sure you are comparing similar loan terms.

Break even point: Divide your total refinancing costs by your expected monthly savings. If refinancing costs $4,000 and saves $250 per month, you would break even in 16 months.

How long you plan to stay: If you expect to sell before reaching the break even point, refinancing may not be worthwhile.

Your new loan term: Restarting a 30 year mortgage can lower your payment while extending the time you carry the debt. Compare the total interest costs, not just the monthly payment.

Do You Have to Wait for Rates to Drop Dramatically?

Not necessarily. Even a modest rate reduction might justify refinancing if your loan balance is large, your closing costs are reasonable, and you plan to keep the home long enough to benefit.

However, mortgage rates change daily, and advertised rates are not guaranteed offers. Your credit profile, home equity, loan type, and current market conditions can affect the rate available to you.

You may also want to compare offers from multiple lenders rather than assuming your current lender will provide the best deal.

What If You Have an FHA or VA Loan?

Some homeowners with FHA or VA mortgages may qualify for streamlined refinancing options. These programs can simplify certain parts of the process, although eligibility requirements, fees, and other conditions still apply.

Ask your mortgage professional whether your current loan qualifies and whether refinancing would produce meaningful savings.

The Bottom Line

Buying a home when rates are higher does not necessarily mean you are stuck with that rate for the life of your mortgage. If rates fall, refinancing could help you reduce your payment or save on interest.

The smartest move is to evaluate the complete financial picture: your new rate, closing costs, break even point, loan term, and plans for the property.

Reach out to me directly—I’d be happy to go over the specifics to help you figure out the best plan of action.

As always, you can set up an appointment with me here…

Ask for Seller Concessions or a Rate Buydown — Not Just a Lower Price

October 5, 2026 / Tom Bonetto

If you’re shopping for a home right now, you have more leverage than you’ve had in years — and how you use it matters.

Roughly 42% of listings are cutting their price. Active inventory is near ~1.17 million homes, the highest since late 2019, and up about 5–6% from a year ago.

Listing prices have been declining year over year for 36 weeks. Mortgage rates are in the mid 7% range (roughly 7.49% at the time of this article).

Sellers are more open to negotiation. Buyers who only ask for a smaller sticker price may be leaving better options on the table.

A price cut isn’t always the best ask

A modest drop in list price can feel like a win. But depending on your loan, it may not change your monthly payment much — and it doesn’t always help with closing costs. Seller concessions (credits toward closing costs) and rate buydowns often do more for your real monthly budget.

roll of american dollar banknotes tightened with band

Closing-cost credit: Reduces cash you need at the table. Useful if you’re tight on reserves or want to keep more money for moving, repairs, or an emergency fund.

Temporary buydown (e.g., 2-1): Lowers your payment in the early years while you settle in, refinance later, or grow income.

Permanent buydown (points): Can lower your rate for the life of the loan when the numbers work.

Sometimes the smartest offer is to keep the price closer to list and ask the seller to fund a credit or buydown that improves your payment or cash-to-close.

Why this works in today’s market

Sellers still care about net proceeds and the “sold” story. A modest price cut plus a targeted credit can get you under contract without forcing them into a deep discount. With so many homes already cutting price, you’re not being difficult by asking — you’re being practical.

How to talk about it with your agent and lender

1. Ask your lender to run side-by-side numbers: price cut vs. credit vs. buydown.

2. Decide what matters more for you — lower payment, less cash at closing, or both.

3. Have your agent present the ask as a path to a clean close, not a hardball tactic.

4. Get pre-approved so sellers know your financing is real when you negotiate.

Next step

If rates above 7% have you hesitating, don’t assume the only lever is “wait for a lower list price.”

Ask about seller concessions and buydowns.

Call me anytime to keep the conversation going, ask questions, or run numbers.

Should I Wait for Mortgage Rates to Drop Before Buying a Home? – Navigating Home Buying in a Mid-6% Interest Rate Market

August 24, 2026 / Tom Bonetto

There’s a lot of energy right now in the media and the real estate world around one question: How do you navigate buying and selling homes (primary residences, second homes, or investment properties) when interest rates are in the mid-6s?

The most common version of that question is: “Should I wait for rates to come down?” The underlying assumption seems plain — lower rates mean lower cost on the loan…but it’s truly not that simple.

I’ve covered this topic before in podcasts and blog posts, but the conversation keeps coming up, so I want to dig into it with a real-world example and some clear numbers.

A Quick but Important Disclaimer

The interest rates I use below are samples only. I am not advertising them, not suggesting they are available today, and not inviting anyone to call me expecting these exact rates. They are simply tools to illustrate how to evaluate the decision of waiting versus buying now.

I’m also using a conventional conforming 30-year fixed loan (Fannie or Freddie) with an 80% loan-to-value ratio, so there is no mortgage insurance in the example. The principles hold either way.

Why the Interest Rate Alone Is Not the Full Story

Most people focus almost exclusively on the rate. That’s understandable, but incomplete.

When I evaluate the true cost of a loan, one of the most important numbers I look at is the principal balance remaining at years 5, 7, and 10 (sometimes year 3 depending on the situation).

Why? Because it is near a statistical certainty that the average loan in the United States is retired—through sale or refinance—somewhere between years 7 and 10. Very few people take a 30-year mortgage all the way to term.

During those early years, the vast majority of each payment is interest. Lenders know this. Most of the public does not.

If we accept that the loan will likely be refinanced or paid off in that window, then the remaining principal balance becomes a critical part of the overall cost equation.

The question is not simply “What is my payment for the next few years?” It is “How do I own this home in the shortest effective duration possible?”

A Concrete Example

Let’s assume a $500,000 home with 20% down—a $400,000 loan.

Buy today at a sample rate of 6.75%. Five years later, the remaining principal balance is approximately $375,503.

Now suppose your gut tells you rates will drop by half a percentage point within a year to 6.25%. You wait.

In that year, the home appreciates 3% (I’ll address appreciation in a moment), so the new purchase price requires a loan of about $412,000.

Buy one year from now at 6.25%. Five years after that purchase (six years from today), the remaining principal balance is approximately $384,549.

From a principal-balance perspective alone, you would have been better off buying today at the higher rate.

What About Home Appreciation?

Across the country, the best current estimates for national average home-price appreciation this year land somewhere in the 1.5%–3% range. Prices have been relatively stable and continue to rise in many markets.

Are there neighborhoods where values are flat or declining? Absolutely—especially certain pockets inside large metropolitan areas. That is why you need a strong real estate agent who can speak in numbers, not just anecdotes. Ask them:

What has this specific property or neighborhood done historically?
What do the data suggest for the next 12 months?

Historically, year-over-year depreciation is rare, but it can happen. Even if you believe values will decline, a competent lender can run the same model with a negative appreciation assumption so you can see the math clearly.

Other Costs That Often Matter More Than the Rate

Waiting for rates also means giving up the negotiating environment we have today. Inventories have improved. The market is slower. Sellers are more willing to offer concessions. Competitive bidding is far less intense than it was a few years ago.

Here’s a practical tip many buyers overlook:

If a seller offers, say, $10,000 in concessions, in many cases, the smarter move is not to use that money to buy down the rate. Instead, have the seller cover a large portion of your closing costs, take a slightly higher rate from the lender (which generates a lender credit), and then use the net cash advantage to increase your down payment or shorten the term while keeping the payment roughly the same.

If you still believe rates will fall later, this approach can leave you in a stronger position to refinance. The decision is nuanced. A blanket “I’m waiting for rates to drop” is, in many (if not most) cases, a costly gut-level choice rather than an analytical one.

happy couple holding and showing a house key

What You Should Do Next

Mortgage and real-estate decisions are subtle. They require a team that can run the numbers.

Work with a real estate agent who can discuss both experience and data on current values, historical performance, and reasonable expectations for the next year.
Work with a lender who can build simple but solid models that incorporate rate scenarios, appreciation (or depreciation), remaining principal balances, closing-cost credits, and term options.

If your lender cannot or will not do that kind of math, find one who will. In a higher-rate environment, the analytical work becomes more important, not less.

When rates were 2.75%, the risk profile was different. Rates in the mid-6s still demand clear-eyed analysis alongside gut feel.

Let’s Talk

I hope this discussion helps you think more clearly about the true cost of waiting.

If you’re trying to figure out whether a particular house or refinance makes sense in this market, do contact me. I’m happy to run the numbers, walk through the trade-offs, and help you see the full picture.

Reach out to me directly—I’d love to talk strategy and explore how we can best take advantage of market conditions to help you succeed.

As always, you can set up an appointment with me here…

Your Assets Can Now Help You Qualify for a Mortgage

August 17, 2026 / Tom Bonetto

close up shot of scrabble tiles on a white surface

When you apply for a mortgage, most people naturally think about their paycheck. How much do I earn? What does my tax return show? How much income can the lender use? But what if your income doesn’t tell the whole story about your financial strength?

A new Freddie Mac guideline change creates an important opportunity for borrowers who have substantial savings, investment accounts or other eligible assets.

In certain situations, those assets can now be converted into qualifying income for a mortgage. In other words, the lender may be able to look at not only what you earn, but also what you’ve accumulated.

Turning Assets Into Qualifying Income

The concept is often called “asset depletion” or “asset-based income.” The idea is relatively simple: instead of requiring you to actually withdraw money from your investment accounts every month, the lender calculates a monthly income amount based on a portion of your eligible assets.

For example, suppose you have $1,000,000 in eligible assets. Under the revised Freddie Mac calculation, a simplified example would divide that amount by 180 months, producing approximately $5,556 per month of qualifying income.

You aren’t necessarily required to spend $5,556 each month. The calculation simply allows a portion of your assets to be recognized as income for mortgage qualification.

The New Calculation Can Make a Big Difference

This is where the change becomes particularly interesting.

Freddie Mac previously used a 240-month calculation for this type of asset qualification. The new 180-month calculation means the same amount of assets can produce roughly 33% more qualifying income. For example, $1 million of qualifying assets would have produced about $4,167 per month under a 240-month calculation.

Under the new 180-month calculation, that becomes approximately $5,556 per month. That’s an additional $1,389 per month of qualifying income without the borrower having to earn another dollar from employment.

You Can Combine Assets With Other Income

Perhaps the biggest benefit is that asset-based income doesn’t necessarily have to stand alone. It can potentially be combined with other qualifying income sources.

Imagine a borrower earning $5,000 per month from employment who also has $1,000,000 in eligible assets. If the assets generate approximately $5,556 per month under the applicable calculation, the borrower could potentially have more than $10,500 per month in qualifying income before considering other applicable income sources and underwriting requirements.

a hand holding a magnifying glass near wooden table

This can make a meaningful difference for someone whose traditional income alone isn’t enough to qualify for the home they want.

Investors Have a New Opportunity, Too

The change is particularly noteworthy for real estate investors.

The revised Freddie Mac guidelines expand the use of accumulated assets as income to investment property transactions, creating a conventional financing opportunity that wasn’t previously available under this particular asset-based approach.

That’s significant for an investor who has substantial assets but whose traditional income doesn’t support the additional mortgage debt they want to take on.

Here’s an Example for an Investment Property

Let’s say an investor wants to purchase a $600,000 rental property and has $1.5 million in eligible investment assets.

After accounting for the funds required for the purchase and other applicable requirements, suppose $1,200,000 remains available for the asset-income calculation. Dividing $1.2 million by 180 produces approximately $6,667 per month in qualifying income.

That income could potentially be combined with the borrower’s employment income and eligible rental income to help qualify for the mortgage.

The exact maximum loan-to-value, reserve requirements and qualifying income will depend on the transaction and the automated underwriting results, but the important point is that investment property borrowers now have another conventional option to explore

This Could Be Especially Valuable for Retirees and High-Net-Worth Borrowers

Consider someone who has spent decades building a retirement portfolio but doesn’t have a large traditional monthly income.

Maybe they receive Social Security, a pension or investment income, but their taxable monthly income doesn’t accurately reflect their financial resources. A borrower could potentially have hundreds of thousands—or even millions—of dollars in retirement and investment assets while appearing to have relatively modest monthly income.

Asset-based qualification provides another way to look at that financial picture. Of course, not every asset qualifies, and there are specific documentation, accessibility and underwriting requirements, so the actual calculation must be reviewed on a case-by-case basis.

Conventional Financing Isn’t Always the Only Answer

It’s also important not to assume that Freddie Mac’s new approach will automatically be the best option for every borrower.

There are Non-QM and other specialized mortgage programs that have offered asset-based qualification for years, and some may use shorter asset-depletion periods that produce substantially more qualifying income. The tradeoff can be higher rates, different down-payment requirements or other program restrictions.

The right question isn’t simply, “How much can I qualify for?” It’s “Which financing strategy makes the most sense for my overall financial goals?” That’s where comparing multiple options becomes important.

Your Balance Sheet Could Be More Powerful Than You Think

The biggest takeaway is simple: your mortgage qualification isn’t necessarily limited to your paycheck.

If you’ve accumulated significant savings and investments, those assets may be able to help you qualify for a mortgage—even when your traditional income doesn’t tell the entire story. And because the revised Freddie Mac rules can be used in conjunction with other qualifying income and can now extend to investment properties, this creates another tool for homebuyers, retirees and real estate investors.

If you have substantial assets but have been concerned that your income may not be high enough to qualify, it’s worth having a mortgage professional look at the entire picture before assuming you can’t qualify.

Reach out to me directly—I’d love to talk strategy and explore how we can utilize these new regulations to help you succeed.

As always, you can set up an appointment with me here…

Home Prices Just Ticked Down for the First Time in 3 Years. Is Fall Still a Window?

Home Prices Are Finally Showing Signs of Weakness

Rising Inventory Is Giving Buyers More Choices

The Best Negotiation May Not Be a Lower Price

Should You Buy This Fall or Wait for Better Conditions?

In Conclusion

What Happens If Mortgage Rates Fall After You Buy?

How Refinancing Can Save You Money

When Does Refinancing Make Sense?

Do You Have to Wait for Rates to Drop Dramatically?

What If You Have an FHA or VA Loan?

The Bottom Line

Ask for Seller Concessions or a Rate Buydown — Not Just a Lower Price

A price cut isn’t always the best ask

Why this works in today’s market

How to talk about it with your agent and lender

Next step

Should I Wait for Mortgage Rates to Drop Before Buying a Home? – Navigating Home Buying in a Mid-6% Interest Rate Market

A Quick but Important Disclaimer

Why the Interest Rate Alone Is Not the Full Story

A Concrete Example

What About Home Appreciation?

Other Costs That Often Matter More Than the Rate

What You Should Do Next

Let’s Talk

Your Assets Can Now Help You Qualify for a Mortgage

The New Calculation Can Make a Big Difference

You Can Combine Assets With Other Income

Investors Have a New Opportunity, Too

Here’s an Example for an Investment Property

This Could Be Especially Valuable for Retirees and High-Net-Worth Borrowers

Conventional Financing Isn’t Always the Only Answer

Your Balance Sheet Could Be More Powerful Than You Think

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