Rates Above 7%? Here's How Houston Buyers Are Finding Relief

If you've been watching mortgage rates lately, you've seen the headline: 30-year conventional rates have climbed back above 7%. For many buyers, that number is enough to hit pause.

But buyers aren't giving up. According to REALTOR® Magazine, borrowers are turning to two strategies to keep payments manageable: adjustable-rate mortgages (ARMs) and builder buydowns.

Option 1: Adjustable-Rate Mortgages (ARMs)

An ARM offers a lower interest rate for an initial fixed period, often 5, 7, or 10 years, before the rate adjusts periodically based on market conditions.

Why buyers like them:

    •    A lower starting rate means a lower monthly payment up front

    •    Great for buyers who expect to move or refinance before the fixed period ends

What to keep in mind:

    •    Your payment could rise after the fixed period ends

    •    Rate caps limit how much it can change, so know your loan's caps

Option 2: Builder Buydowns

With new construction, builders may pay to lower your interest rate, either for the first year or two (a temporary buy-down) or for the life of the loan.

Why buyers like them:

    •    Savings in the early years, when budgets are often tightest

    •    The builder covers the cost as an incentive, which can be more valuable than a price cut

What to keep in mind:

    •    With a temporary buydown, the rate steps up to the full note rate after the buydown period

    •    Compare the total deal, including price, upgrades, and incentives, against a resale home

Which Is Right for You?

It depends on how long you plan to stay, your comfort with risk, and your budget. An ARM can make sense for a shorter timeline. A buydown can be a smart way to ease into homeownership. And some buyers choose a traditional fixed-rate loan for long-term certainty.

The best move is to run the numbers side by side with a trusted lender before you decide.

Thinking About Buying in Houston?

Rates will keep moving, but your strategy doesn't have to wait on them. I can help you compare your options, connect you with trusted lenders, and find the right home for your budget.

Angalene Lamar, REALTOR®

Elevé Relocation Group | Collective Realty Co.

📞 713-818-7252

✉️ mailto:[email protected]

Source: REALTOR® Magazine via ListReports. This post is for informational purposes only and isn't financial advice. Please consult a licensed lender about your situation.