Low Rates or Lots of Leverage? Buyers Rarely Get Both

If you’ve been watching mortgage rates lately, you may feel like the market has put you in a tough spot. Rates have climbed above 7% this year, and for many buyers, that has been enough reason to pause and wait for something better.

That reaction makes sense. But there’s an important part of the story many buyers miss.

When you buy a home, you usually get one of two advantages: low mortgage rates or strong negotiating power. It’s rare to get both at the same time. And in today’s market, buyers may have more leverage than they realize.

Why Low Rates and Buyer Leverage Rarely Happen Together

Let’s look back for a moment.

In 2020 and 2021, mortgage rates were hovering near 3%. That created a wave of buyer demand. On the surface, low rates looked like a huge win. But there was a catch. There were far more buyers than available homes.

That imbalance made the market incredibly competitive. Buyers often had to move fast, compete against multiple offers, waive contingencies, or offer above asking price just to have a chance.

As Jake Krimmel, Senior Economist at Realtor.com, explained:

> "Seller’s markets peaked at 98 of 100 metros in spring 2022 after two years of mortgage rates near 3%."

In other words, low rates came with very little room to negotiate.

Then things began to shift. As rates rose in the second half of 2022, some buyers stepped back. Inventory started to grow, and the market gradually became less tilted toward sellers. Fast forward to today, and many areas are seeing a much more buyer-friendly environment.

According to Realtor.com, about two-thirds of the top 100 metros now lean in favor of buyers.

What Buyer Leverage Looks Like Right Now

This is where today’s market gets interesting.

There are more homes for sale than there have been in years. When buyers have more options, sellers often need to be more flexible in order to stand out and get their homes sold.

Lawrence Yun, Chief Economist at the National Association of Realtors, puts it this way:

> "Higher inventory and lengthening days on market give buyers improved negotiating power."

That negotiating power can show up in several ways, including:

• Seller concessions toward closing costs

• Credits for repairs or updates

• Price reductions

• Seller-paid mortgage rate buydowns

According to Redfin, nearly half of buyers are getting some type of concession from the seller right now. That is a meaningful advantage, especially if you are trying to make the monthly payment work in today’s rate environment.

So even if the interest rate is not exactly what you hoped for, there may still be ways to improve the overall deal.

A Higher Rate Does Not Always Mean a Worse Opportunity

This is one of the biggest mindset shifts buyers may need to make in today’s market.

A lot of people focus only on the mortgage rate. And while that absolutely matters, it is not the only factor that affects affordability.

If a seller is willing to contribute toward a rate buydown, cover some closing costs, or reduce the price, that can make a real difference in your upfront expenses and monthly payment.

In some cases, today’s market conditions may give you more flexibility than you would have in a lower-rate, high-competition market.

That is why it is so important to look at the full picture, not just the headline rate.

Why Waiting for Lower Rates Could Backfire

It is understandable to think, "I’ll just wait until rates come down."

But there are two important things to keep in mind.

First, many industry forecasts from groups like Fannie Mae, the Mortgage Bankers Association, and Wells Fargo suggest rates are not expected to fall dramatically in the near future.

Second, if rates do drop in a meaningful way, many buyers who have been waiting on the sidelines are likely to jump back in all at once.

That could mean:

• More competition

• More bidding wars

• Fewer seller concessions

• Less negotiating room

• Higher pressure to act quickly

So while a lower rate may sound appealing, it often comes with a trade-off. You may save on the rate, but lose the leverage that helps you negotiate a better deal.

The Real Question: Does the Move Make Sense for You?

This does not mean everyone should rush out and buy a home today.

The right time to buy is when it makes sense for your goals, your finances, and your timeline. But if you have a real reason to move, such as needing more space, downsizing, relocating, or simply being ready for a change, today’s buyer-friendly market may offer opportunities worth exploring.

The key is knowing where the leverage is and how to use it.

That might mean targeting homes that have been on the market a little longer, identifying sellers who may be open to concessions, or negotiating terms that better support your budget.

Bottom Line

Buyers rarely get low rates and strong negotiating power at the same time. Right now, the leverage is with buyers in many markets, and that can open the door to opportunities you may not have considered.

If you’re wondering whether today’s market could work for you, let’s talk through it together. I’d be happy to help you identify homes where sellers may be open to covering closing costs, offering a price reduction, or paying for a rate buydown.

Contact Zac Pasmanick with The Zac Team today:

Phone: 14045647272

Email: zac@zac.biz

Website: https://mlsinatlanta.com

Let’s find out if today’s buyer leverage can help make your move possible.