Myth #3 — Interest Rates Are Too High to Buy

 

“I can’t afford to buy a home.” 

“The interest rates are too high.”

“We’re entering a recession.”

 

These concerns are real, and I hear some version of them often. Sometimes they come from current market conditions. Sometimes they come from outdated advice that has been repeated so many times it starts to feel like fact.

Either way, buying a home can feel out of reach when the conversation is dominated by fear, uncertainty, and half-truths. So I want to take a closer look at some of the most common home-buying myths I hear.

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Myth #3: Interest rates are too high to buy

 

This is one of the biggest reasons I hear from buyers who are sitting on the sidelines.

And the concern is real. Interest rates directly affect affordability. A higher interest rate can mean a higher monthly payment, which can change your budget, your comfort level, and the type of home that makes sense for you.

So the myth is not that interest rates do not matter. They absolutely do. The myth is that higher interest rates automatically mean buying is a bad idea. And that part is much more complicated.

For many buyers, the last few years have been disorienting because we are still comparing today’s rates to the unusually low rates we saw during the pandemic. When buyers remember 3% mortgage rates, anything in the 6% or 7% range can feel extreme.

But historically, those ultra-low rates were the exception, not the norm.

Based on historical mortgage rate data from Freddie Mac, today’s rates are still considerably lower than many periods in the past. Buyers in the 1980s saw mortgage rates well into the double digits. Even in later decades, rates were often higher than what many buyers had grown used to before and during the pandemic.

 

Released May 14, 2026, this Freddie Mac data shows how mortgage rates have fluctuated over the decades, with periods of both decline and increase along the way. Even compared to the years before the pandemic, today’s rates remain below many historical averages.

 

The challenge with interest rates is that they affect both math and psychology.

The math is straightforward. As rates rise, monthly payments rise. A buyer may qualify for less than they did when rates were lower, or they may need to adjust their price range, increase their down payment, consider different loan options, or look at different neighborhoods or property types.

The psychology is harder. A lot of buyers are waiting for rates to come back down before they make a move. That may seem logical, but it also assumes that everything else will stay the same. And real estate rarely works that way. 

If rates drop, demand may increase as more buyers re-enter the market. Competition may rise as homes receive more offers and sellers feel less pressure to negotiate. As a result, prices may go up.

In other words, a lower interest rate does not always mean a better overall buying opportunity. Sometimes a higher-rate market gives buyers something they may not have had when rates were lower: more breathing room.

When fewer buyers are actively competing, there may be more time to tour homes, compare options, review disclosures carefully, complete home inspections, and make a thoughtful decision. Buyers may have more room to negotiate on price, repairs, closing costs, seller credits, or rate buydowns. They may also be able to include contingencies that were harder to keep in a more competitive market.

 

This is one of the biggest trade-offs in real estate.

Lower rates can make monthly payments more manageable, but they often bring more buyers back into the market. Higher rates can make affordability more challenging, but they may also give buyers more leverage at the negotiating table.

Neither market is perfect. Each one comes with its own set of compromises. The question is which set of trade-offs makes more sense for you.

There is a common phrase in real estate: “Marry the house, date the rate.”

The idea is that you are committing to the home, but not necessarily to the interest rate forever. If rates drop in the future, refinancing may be an option.

There is some truth to that, but I think the phrase deserves a little caution. Refinancing is never guaranteed. Rates may not drop when you hope they will. Your financial situation may change. Your home’s value may change. And refinancing comes with costs, so it only makes sense if the numbers work.

For that reason, I would not suggest buying a home today based only on the hope that you can refinance later. A healthier way to think about it is this: buy the home if the payment works for you now, and treat a future refinance as a possible bonus, not the entire plan.

 

The interest rate matters, but the monthly payment matters more.

A buyer does not live inside an interest rate. A buyer lives inside a monthly payment, a neighborhood, a commute, a home, and a long-term financial plan.

That is why it is so important to look at the whole picture. Interest rates are one piece of the affordability puzzle, but they are not the only piece. Purchase price, down payment, loan type, property taxes, insurance, HOA dues, closing costs, seller credits, maintenance, and your long-term plans all matter too.

A rate that feels high compared to a few years ago may still be workable if the total monthly payment fits your budget, the home meets your needs, and you plan to stay long enough for ownership to make sense. On the other hand, even a low rate is not a good deal if the payment stretches you too thin or pushes you toward a home that does not work for your life.

 

The goal is not to ignore interest rates. The goal is to avoid letting them make the entire decision for you.

If the payment does not work, waiting may be the right choice. But if you are waiting because you assume today’s rates automatically make buying a bad financial decision, it may be worth taking a closer look.

The better question is not, “Are interest rates too high?”

The better question is, “Does buying make sense for my finances, my timeline, and my life at today’s numbers?”

The important thing is to make the decision based on the full picture, not just the rate.

 

Kristina Bulajewski
Broker | Realtor®
Windermere Real Estate Co. | Ballard
Helping buyers and sellers navigate Seattle real estate with thoughtful guidance and local insight.