Four price cuts, closing costs covered, a rate buydown thrown in — and not one offer. That's TJ and Jenni Vaninetti's week. Their hilltop house in greater Seattle, the one with the sunset views, appraised at just under $900,000; that's where they started, about 75 days ago, expecting a quick sale. This week's fourth cut took it to $780,000. "There's just no buyers," TJ told the Journal's Nicholas G. Miller. That's a 7.40% mortgage, seen from the seller's side of the table.
Freddie Mac's weekly survey put the 30-year fixed at 7.4%, up from 7.28% — the highest since November 2023 and more than a point above the 6.30% of a year ago; Bankrate's separate survey reads 7.50%. The Fed doesn't set this rate directly. Most home loans are gone within about a decade, refinanced or paid off in a sale, so lenders price the 30-year off the 10-year Treasury — and the bond selloff pushed that yield as high as 5.365% early Wednesday before it eased to 5.232% at Thursday's close.
Nationally, prices are still climbing: supply is tight, and owners sitting on cheap old loans aren't selling. Metro by metro, it's different. In parts of the Sunbelt that overbuilt after the pandemic, August prices — before this latest leg up in rates — were down 5% from a year earlier around Dallas, 3.4% in Austin and 1.9% in Tampa, per First American; Seattle, where tech layoffs have buyers nervous, was off 1.8%. Redfin says 21% of sellers trimmed their asking price in the four weeks to Sept. 20, only a little above a year earlier but the highest for the season in records that start in 2022.
The haggle has moved from the price to the rate
In Austin, mortgage broker Jackson Roberts says 75% to 80% of his deals now include a seller credit to buy down the buyer's rate. Here's why that credit matters. A Zillow calculator the Journal cites puts a $500,000 house with 10% down at $3,716 a month at 7.4%, taxes and insurance included, against $3,507 at early September's 6.71% — by our arithmetic, $209 a month for 0.69 of a point on a $450,000 loan. An early lock works the same math in reverse: Charles Hansel and his fiancée, Ellen Smith, locked 6.625% in September, then offered the asking price on a $650,000 cottage in a Charlotte neighborhood they'd assumed was beyond them — and got it.
Builders are out in the same weather. A B10 brief from Krystal Hur says the bond selloff has helped push D.R. Horton (DHI) and PulteGroup (PHM) lower in recent days, though both closed up Thursday in the Journal's tables — DHI at 135.82, PHM at 113.53.
Our read
This is Housing (M6) with a Time Value of Money (M3) chaser. Buyers: price the payment, not the house, at the rate you'd actually get this week — 7.4% to 7.50%, depending on the survey — not the refinance you're hoping for. Then ask which buydown is on offer. A permanent one is points the seller pays up front to lower your rate for the life of the loan; the Journal's example is your yardstick — 0.69 of a point is about $209 a month on a $450,000 loan by our arithmetic — so weigh what the seller's dollars buy that way against the same dollars off the price. A temporary one cuts the rate for a year or two, then steps up; budget for the payment after it ends.
Sellers and downsizers: a price cut isn't an insult, it's the market talking, and where prices were falling before this run-up, meeting buyers early usually costs less in carrying costs than a string of cuts that chases them. Nothing changes in the books — D.R. Horton and Lennar (LEN) sit in one book each, Home Depot (HD) in 8 and Lowe's (LOW) in 6, all held at weight, nothing added. On either side of a closing this fall, bring the loan estimate and the concession sheet to a review, and we'll price the payment at today's rate, with the buydown and with an equal price cut before anyone signs. Better to run those numbers while the offer's still a draft.