Buyers May Be Watching the Wrong Thing

Mortgage rates are getting plenty of attention again this week.

After moving back toward the upper 6% range, rates are understandably influencing buyer conversations about affordability, monthly payments and whether it makes sense to wait.

But buyers who focus only on the rate may be overlooking another important part of today's market:

They have more choices.

Inventory has continued to build while buyer demand has softened. Nationally, new listings recently reached their highest level since April, while pending home sales fell to a six-month low. That combination is giving serious buyers more opportunities to negotiate than they had during the highly competitive markets of the past several years.

For buyers across Napa, Sonoma, Marin, Solano, Contra Costa and San Francisco, the question this week shouldn't simply be, “When will mortgage rates come down?”

It should also be: “What can today's market allow me to negotiate?”

Mortgage Rates Moved Higher After Jackson Hole

Mortgage rates moved higher following Federal Reserve Chair Kevin Warsh's remarks at the Jackson Hole economic symposium.

Warsh emphasized concerns about persistent inflation and indicated the Fed could consider raising its benchmark rate if inflation doesn't make clearer progress toward the central bank's 2% target. Markets interpreted the speech as more hawkish than expected, pushing bond yields and mortgage rates higher.

Depending on the rate source and methodology, national 30-year fixed averages were sitting in roughly the mid-to-upper 6% range as August ended.

That means affordability remains a real concern.

But mortgage rates don't exist in isolation.

While borrowing costs have moved higher, the housing market itself has become more favorable to many buyers.

Inventory Is Giving Buyers More Room to Breathe

One of the biggest changes in today's market is simply the number of homes buyers have to consider.

Redfin reported that total homes for sale increased during the four weeks ending August 23 and reached their highest level since May. At the same time, pending sales declined.

Realtor.com's August data similarly showed active inventory near its highest level since late 2019.

More inventory doesn't mean every home is sitting unsold or every seller is willing to make a deal. But it changes the conversation. When buyers have alternatives, they don't necessarily have to stretch for the first acceptable home that becomes available. They can compare. They can look at recent sales. They can evaluate how long a property has been listed. And if the circumstances support it, they can negotiate.

What Buyer Negotiating Power Actually Looks Like

“Negotiating power” can sound vague, so it's worth getting specific. Depending on the home, seller motivation and competing interest, buyers may have opportunities to discuss:

• purchase price
• seller-paid closing costs
• repairs or credits
• temporary rate buydowns
• closing timelines
• other allowable concessions

Redfin reported earlier this summer that seller concessions had become increasingly common nationally, although they remained less prevalent in some competitive Bay Area markets.

That distinction matters. Northern California is not one market.

A buyer looking in Solano County may encounter a very different negotiating environment than someone shopping in a particularly competitive part of Marin or San Francisco.

Even within Napa or Sonoma County, the answer can change by neighborhood, price point and property condition.

The better question isn't: “Is this a buyer's market?” It's: “What is happening with this specific home?”

Don't Compare a Future Rate With Today's Market in Isolation

It's perfectly reasonable to hope mortgage rates improve. A lower interest rate could reduce a buyer's monthly payment. But there's another side to that scenario. If rates become meaningfully more attractive, some buyers who have been sitting on the sidelines may return to the market. More buyers can mean more competition for desirable homes. That doesn't guarantee prices will rise. But it can reduce the negotiating room buyers may have while demand is softer. That's why comparing today's mortgage rate to a hypothetical future mortgage rate doesn't tell the whole story. You also have to compare:

• today's inventory
• today's asking prices
• today's competition
• today's potential seller concessions

with whatever those conditions might look like later. No one can know that future combination with certainty.

More Choices Can Be Especially Valuable in Northern California

The ability to compare homes matters even more in Northern California, where purchase prices can make small differences in terms especially meaningful.

A buyer looking at homes in Napa Valley may be deciding among properties with very different lot sizes, condition and locations.

In Sonoma County, buyers may be weighing city convenience against more rural properties.

Marin and San Francisco can still have pockets of significant competition, while buyers in parts of Solano and Contra Costa Counties may encounter more available inventory.

That's why today's increased selection is valuable even when it doesn't lead to a dramatic price reduction. It gives buyers information. Instead of wondering what another home might look like, they may actually have several properties to compare. That can lead to a more thoughtful offer and a clearer understanding of value.

Could Cash Edge Strengthen a Buyer's Position?

This week's financing spotlight is Cash Edge, a program designed to help qualified buyers present an all-cash offer.

For eligible borrowers, a cash-style offer may provide sellers with greater certainty and can help a buyer stand out when a particularly desirable home still attracts competition.

It's important not to confuse that with a guarantee of better pricing or seller concessions.

But it may provide another way for qualified buyers to structure a competitive offer without relying solely on increasing the purchase price.

In a market with more inventory, this becomes especially interesting.

A buyer may have the ability to negotiate on one property while also being prepared to compete more aggressively if another home attracts several offers.

Program eligibility, costs, timelines and lending requirements should always be reviewed directly with the lender.

What Should Buyers Watch This Week?

This week's major economic focus will be employment data.

Markets remain highly sensitive to economic reports because stronger-than-expected growth can increase concerns about inflation and future Fed policy, while weaker data can sometimes relieve upward pressure on bond yields and mortgage rates.

But buyers don't have to wait for Friday's report to start preparing.

If you're considering buying, this is a useful week to:

Understand your comfortable monthly payment.

Talk with your lender about available financing strategies.

Watch how long homes in your target neighborhoods are staying on the market.

Pay attention to price reductions.

And when a property looks promising, have your agent ask what the seller may actually be willing to discuss.

Preparation Matters More Than Predicting Rates

The biggest advantage buyers have today isn't a particular mortgage rate.

It's the ability to make a more informed decision.

Compared with the frantic markets of a few years ago, many buyers now have more time, more homes to evaluate and more opportunity to think carefully about their offer.

That's valuable.

If mortgage rates decline later, great.

But buyers shouldn't assume waiting automatically produces the better outcome.

If buying a home is part of your plan, EO&A can help you understand what's happening in the neighborhoods you're considering, evaluate competing inventory and determine where there may be room to negotiate. Your lender can then help you compare financing options and determine what fits your individual situation.

Don't make your entire home-buying decision around one number.

Look at the whole opportunity.

Happy house hunting 🏡

Sources: Redfin Housing Market Updates; Realtor.com Economic Research; Mortgage rate reporting from NerdWallet and Bankrate/WSJ; Federal Reserve policy coverage from Reuters; market information supplied by Envoy Mortgage.

Common Questions About This Week's Mortgage Update

Are mortgage rates close to 7% right now?

Yes. National 30-year fixed mortgage rate averages were generally in the mid-to-upper 6% range as August ended, although the exact rate a borrower receives depends on the lender, loan program, credit profile, down payment and other factors. Mortgage rates can also change daily as bond markets respond to economic news, inflation expectations and Federal Reserve policy.

Does more housing inventory give buyers more negotiating power?

It can. More available homes give buyers alternatives, which can reduce the pressure to compete aggressively for every listing. Redfin recently reported rising inventory alongside weaker pending sales, creating more negotiating opportunities for serious buyers nationally. Pricing, condition, location and competing offers still matter, so the amount of negotiating room should be evaluated one property at a time.

Should I wait for mortgage rates to fall before buying?

Waiting may be appropriate for some buyers, but mortgage rates are only one part of the decision. If lower rates encourage more buyers to return, competition could increase and some negotiating opportunities could shrink. Buyers should compare today's payment, inventory, asking prices and potential seller concessions with their budget and long-term plans rather than assuming a lower future rate will automatically produce a better purchase.

Are sellers offering more concessions right now?

Seller concessions have become more common nationally as inventory has increased and demand has softened, although conditions vary by market. Redfin reported that 46.2% of U.S. home sales included seller concessions in May, but concessions were less common in some Bay Area markets. Buyers should evaluate each property's time on market, pricing and seller circumstances before assuming concessions will be available.

What is Cash Edge for home buyers?

Cash Edge is a financing program intended to help eligible borrowers present an all-cash offer. The goal is to give sellers additional certainty and potentially strengthen a buyer's offer. Qualification requirements, program costs and transaction details vary, so buyers should speak directly with the participating lender to determine whether the program is available and appropriate for their situation.

Is now a good time to buy a home in Napa or Northern California?

That depends on your financial readiness, timeline and the specific property you're considering. Buyers in Napa, Sonoma, Marin, Solano, Contra Costa and San Francisco may currently benefit from improved selection and, in some cases, more negotiating opportunities. Conditions vary widely by neighborhood, price point and property type, so local inventory and recent comparable sales should be evaluated alongside mortgage rates.


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Real estate and financing information is provided for educational purposes only. Mortgage programs, rates, qualification requirements, seller concessions, and market conditions can change. Buyers should consult their lender and appropriate professional advisors regarding their individual financial situation.