For a variety of reasons mortgage rates are twice what they were less than four years ago. Or, put another way, four years ago they were half of today’s. Are brokers seeing their borrowers sitting on the sidelines, waiting for a big drop in rates?

Some are, but experts don’t see much relief on the horizon, nor is it a good idea to base your client’s financial life on someone else’s predictions of three months from now when they don’t even know what they’re going to have for lunch tomorrow. The average 30-year fixed mortgage rate is 6.81%, and economists at the Mortgage Bankers Association don’t see that dropping below 6.4% through at least 2027. Property values also continue to go up after skyrocketing 43%during the two years of the pandemic.

It is important to keep things in perspective. Brokers know that those pandemic-era deals below 3 percent were an aberration. Before the Great Recession, rates had never dipped below 5 percent. And double-digit interest rates were the norm in the 80s.

Of course, brokers also know that home prices relative to income are much higher now compared to the last few decades. The median sale price on a single-familyhouse in the U.S. has risen well over $100,000 just since the pandemic in 2020.And steep prices are a lot tougher to stomach when your client’s borrowing costs are higher, too.

In fact, buyers of a typically priced home today are signing up for a monthly housing payment of $2,860, according to data from the real estate broker Redfin. That’s roughly $1,200 higher than when rates started rising at the start of 2022.

If your client is looking to buy a house sooner rather than later, you might need to advise them to adjust their approach and expectations. Higher mortgage rates could be the new normal and real estate prices, while not climbing as fast as before, are still climbing. Some borrowers are buying now, expecting to refinance in the future. If they can afford to buy at today’s mortgage rates, they can aim to refinance their loan with you at a lower rate in the future to lower their payments. Remind them to just be prepared if rates don’t drop, since there’s no guarantee.

Other borrowers are opting for an adjustable-rate mortgage. Rates on adjustable-rate mortgages (ARMs) are usually lower than those on fixed-rate mortgages, at least for the first three to 10 years. That can make it a more budget-friendly option, especially if your client is not planning to live in the home forever. Just know that if rates rise after that initial period ends, their costs will go up… but that could be years from now.

Buyers are low balling or asking the seller for concessions. Even though prices are high, sellers don’t have the same upper hand they once did. List prices are rising more than twice as fast as sale prices, according to Redfin, showing buyers have increasing leverage.

Experienced brokers know that no one can consistently and accurately predict what interest rates are going to do, and when they’re going to do it. Orion’s AEs don’t pretend to have any secret knowledge about what mortgage rates are going to do. What we focus on is having great products at competitive rates and concentrating on superior service to help our clients help theirs.

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