If rates hit 8%, the math on new purchases gets brutal. A $450k loan at 8% is $3,303/month. That same loan at 3.25% is $1,957/month. That's $1,346/month difference. Over 30 years, you're talking about $484,560 in additional interest.

The part most buyers don't realize: there are still tens of thousands of FHA and VA loans sitting out there at 2.5-4% that are assumable by law. I close these full-time in Colorado Springs. A buyer who finds an assumable at 3.25% and puts $40k down to cover the equity gap is in a completely different position than someone financing at 8%.

The equity gap is the only real friction point. If a seller only has $60k in equity on a $500k home, the buyer needs $60k cash or a second lien to bridge it. That's a real constraint. But for buyers with cash reserves, this is how you get a 2024 payment on a pre-2022 rate.

If rates do push toward 8%, watch assumable listings get a lot more attention from buyers who figure this out.