Rates Can’t Be Used as an Excuse!

Written by Posted On Monday, 18 April 2022 00:00

The rapid rise in interest rates have caught some off guard and are making a challenging market even more so. However, it’s important to put a few things into context.

  1. 1. Rising rates are not unmanageable by a long shot, and rates in the 5% and 6% range are not going to cause a meltdown as some on social media might have you believe.

  2. 2. Home prices are not rising as fast as they did last year, but just because some sellers are reducing their asking price on homes, doesn’t mean the housing market is falling, it means that they aren’t rising as fast as they were.

  3. 3. While there aren’t as many buyers bidding on the same house as there was before, estimates are that there are still far more buyers than sellers as we speak.

  4. 4. Last year the average cost of a mortgage loan was about 2.96% and .7 points. This was an all time low. To which, there were 6.12 million resale housing transactions.

  5. 5. In comparison, in 2005 there were 7.08 million resales while rates were 7.08% with .6 points and in 2006 there were 6.62 million home resales with rates at 6.41% and .5 points.

Yes, higher rates are going to reduce the amount of money people will be able to borrow by maxing out their payments. But most people don’t max out their payments or will simply borrow less money.

In 2000 rates averaged 8.05% & 1 point, while in 1990 rates were 10.13% and 2.1points, and in 1985 rates were 12.43% and 2.5points; and of course, we had 1982 when rates were 16.04 with 2.2 points. If you had to lock in your deal in October 0f 1981, you likely paid 18.45% and 2.3points IF you could find a lender that would lend you money at all!

Perspective is important. Nobody like higher prices, but it doesn’t stop people from buying houses. The important thing is to be professional and provide exceptional value for your clients and referral partners, and let them know that you can always refinance them in the future should rates move lower; if they don’t, they got in before the peak!

Rents are still moving higher. Purchase applications were up last week by 1.4%. We still have multiple offers and many cases where FHA and VA loans, Seller’s concessions, and local bond program loans are not even involved in today’s markets anywhere near where they once were. 

Rates may continue to push higher, home prices will slow their torrid pace higher, the markets will find the balance, just keep clear on your value to your clients as you help them navigate the path to home ownership.

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Michael White

After 18 years working in all phases of mortgage originations, Mike left day to day originations to start his consulting and coaching company. Now, more than 18+ years later, Mike is working with clients across the country in all markets, big and small, that have generated more than three billion dollars in loan originations within a year.

Mike teaches a system that is focused on time management, action planning, marketing a message, and creating value for both clients and referral sources alike. Quite simply, providing more value leads to more opportunities, more income, less time, and a systematic approach that begs to be duplicated.


By breaking down individual aspects of the mortgage business and providing a step by step approach to creating a consistent flow of opportunities that can lead to a highly successful mortgage practice. That is why people who incorporate these strategies out produce the national averages by almost 3 to 1!

Fundamentals and simple strategies provide day to day activities that help provide a “scheduled success” philosophy. It’s all about identifying, targeting, and establishing profitable referral relationships using exceptional value to keep you in the center of your own referral triangle. 



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