{"id":182205,"date":"2025-04-17T08:05:03","date_gmt":"2025-04-17T14:05:03","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=182205"},"modified":"2025-04-17T08:05:06","modified_gmt":"2025-04-17T14:05:06","slug":"mortgage-rate-fatigue-here-is-how-to-get-off-the-seesaw","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/mortgage-rate-fatigue-here-is-how-to-get-off-the-seesaw","title":{"rendered":"Mortgage Rate Fatigue? Here’s How to Get Off the Seesaw of Wondering When to Buy"},"content":{"rendered":"\n

Watching mortgage rates bounce around over the past few weeks has been liable to give you whiplash. While the rest of the world was wringing its h<\/span>ands about stocks falling off a cliff, real estate investors were quietly crossing their fingers with news that mortgage rates had dropped to their lowest level in six months <\/span>in the aftermath of<\/span> President Trump\u2019s tariff announcement. <\/span><\/p>\n\n\n\n

On April 4, the Friday after Trump <\/span>made the announcement<\/span>, rates were around 6.55%, according to<\/span> Redfin<\/span><\/a>. By April 10, they were inching up<\/span> closer to 7%<\/span><\/a>. <\/span>These dramatic shifts have made <\/span>it almost impossible to predict<\/span> monthly loan payments for prospective real estate investors.<\/span> <\/span><\/p>\n\n\n\n

According to Redfin, the decline in rates following the tariff announcement meant that a buyer on a $3,000 budget had roughly an extra $9,000 in purchasing power as rates fell from 6.82% on March 27 to 6.55% on April 4. On an average-priced home of $425,000, the brief interest rate drop would have lowered the payment by around $600, from $2,716 to $2,777. That has since <\/span>been wiped out<\/span>. <\/span><\/p>\n\n\n\n

Don’t Expect a Market Crash<\/span><\/h2>\n\n\n\n

Redfin economics research lead<\/span> Chen Zhao<\/span><\/a> said: <\/span><\/p>\n\n\n\n

“Even in times of great economic uncertainty, there are people who need to move. For those weary homebuyers, this drop in mortgage rates could be a silver lining of this week’s historic tariffs announcement. However, a word of caution for the general public: This is a wait-and-see moment. Tariffs and the fallout we’ve already seen in the stock market are impacting the economy and could create more volatility in the housing market.”<\/span><\/p>\n\n\n\n

If we’ve learned anything from the last couple of weeks, <\/span>it’s that<\/span> real estate investors cannot rely on waiting and seeing. At this rate, we’ll be in our graves waiting for the right moment to buy. That’s because the longer we wait for the optimum moment, the more home prices will continue to increase, making it more <\/span>difficult<\/span> to qualify for loans and shrinking potential <\/span>cash flow<\/span><\/a>. Equally, a housing crash, dropping rates suddenly <\/span>and<\/span> increasing affordability, as what happened after 2008, seems increasingly unlikely.<\/span><\/p>\n\n\n\n

A Meaningful Decline<\/span><\/h2>\n\n\n\n

“The record low supply of houses on the market protects against a market crash,” Tom Hutchens, executive vice president of production at Angel Oak Mortgage Solutions, a nonqualified mortgage lender, told<\/span> Forbes<\/span><\/a>. While investors pray for a rapid <\/span>reduction in rates<\/span>, dramatic falls lead to sudden price increases, which is detrimental to investing. <\/span><\/p>\n\n\n\n

Rather<\/span>, a gradual, ongoing decline is an ideal scenario. “A meaningful decline in mortgage rates would help both demand and supply\u2014demand by boosting affordability, and supply by lessening the power of the mortgage rate lock-in effect,” Lawrence Yun, chief economist at NAR, said in the company’s <\/span>March report<\/span><\/a>. “But the current high national debt will prevent mortgage rates from falling drastically\u2014and certainly not to the 4%-to-5% range seen during President Trump’s first term.”<\/span><\/p>\n\n\n\n

We’re in a catch-22 because for an increased supply of homes, the market easing and possibly prices lowering have to <\/span>happen to<\/span> boost builder confidence.<\/span> That seems unlikely.<\/span><\/p>\n\n\n\n

“I don’t expect to see a meaningful increase in the supply of existing homes for sale until mortgage rates are back down in the low-5% range,” Rick Sharga, founder and CEO of CJ Patrick Company, a market intelligence and business advisory firm, told <\/span>Forbes<\/span><\/em>.<\/span><\/p>\n\n\n\n

How Real Estate Investors Can \u201cGame the System\u201d<\/span><\/h2>\n\n\n\n

The only way to beat the uncertainty of rate fluctuations is to “game the system” by creating additional cash flow where none previously existed. <\/span>This<\/span> is achieved<\/span> in two ways: increasing an asset’s rental income or <\/span>managing to get<\/span> a lower interest rate. There are practical ways to accomplish this.<\/span><\/p>\n\n\n\n

Increasing cash flow<\/span><\/h3>\n\n\n\n

There are a few ways to increase cash flow without violating zoning restrictions:<\/span><\/p>\n\n\n\n