Chris Cowles Real Estate Blog

How Buyers Are Still Affording Homes

Two strategies buyers are using to make purchasing a home more affordable.

We all know that inflation is still on the rise. The Federal Reserve has raised rates another 75 basis points, and mortgage rates are up to 6.25%. What are buyers doing to combat that lower affordability?

One way is assumable loans, which let a willing buyer take over the existing loan. There are two different types: qualifying and non-qualifying, but there are almost no more non-qualifying loans left. Instead, almost all assumable loans require that the borrower qualifies to the same standards as the seller.

You’ll see a lot more of these loans in the market. VA and FHA buyers might start assuming these loans, and while they’ll have to make up the difference between the purchase price and their offer, that won’t be a big issue.

The other trend we’re seeing is 2-1 buydowns. These give buyers a 2% discount on their rate for the first year of their loan and a 1% discount the next year. These can help many buyers get into homes sooner.

If you have any questions about assumable rates or buydowns, call or email me. I’d love to help you out.