Lower Rates Today: How Much More Could You Afford?

Mortgage rates are much improved compared to this time last year, and the math is meaningful. Depending on the loan type, today’s rates are roughly 0.55% to 1.28% lower than a year ago, putting rates near 15-month lows. That kind of move can change a monthly payment by hundreds of dollars, which can directly impact how much home you can comfortably afford.

Below is a simple comparison using a $700,000 loan amount and principal + interest only (taxes, insurance, HOA, and mortgage insurance are not included). The 7/6 ARM payment shown is the starting payment based on the initial rate and a 30-year amortization. ARM rates and payments can increase after the fixed period. Final terms vary by lender, including margin and caps.

Disclaimer: All rates referenced in this post are based on the Mortgage News Daily Rate Index, a national average used for tracking market movement. This index is not an advertised rate or APR for any specific loan program and individual pricing and APR will vary by borrower and lender.

The Big Takeaway: Lower Rates Can Equal Real Buying Power

When rates drop, buyers often focus on the headline number (the interest rate), but the real story is what happens to the monthly payment.

For a $700,000 loan:

A buyer looking at a 30-year conventional is roughly $400/month better off than last year.
A buyer considering a 7/6 ARM could see a starting payment that’s roughly $585/month lower than last year.

That difference can be the gap between:

Qualifying vs. not qualifying
Feeling stretched vs. feeling comfortable
Settling vs. getting the home that actually fits

This is also the kind of rate shift that tends to pull more buyers off the sidelines.

Inventory Check: Active Listings Are Near 6-Year Highs

Rates are only half the story. Inventory matters just as much, and active listings are now near 6-year highs. That means buyers generally have more homes to choose from than they did during the tight, low-supply years. Even more notable, inventory has been trending upward since February 2022, gradually creating a more balanced environment for home shoppers.

More listings usually means:

Less urgency to overbid on the first house you see
More room for negotiation (depending on price point and location)
Fewer “any house is better than no house” decisions

Active Listing Home Inventory November 2025

Why This Matters Right Now: Spring Competition Can Heat Up Fast

If rates continue trending down, more buyers tend to re-enter the market. That typically shows up in the spring when more buyers start touring and multiple offers become more common again in the most desirable areas.

So even though inventory is improving, the advantage can shrink quickly if demand ramps up.

What To Do Next: Get Ready Early (Before Everyone Else Does)

If you’re thinking about buying in the next 3 to 6 months, the best move is to get prepared now so you can act decisively when the right home pops up.

We can help you:

Run side-by-side scenarios (conventional vs. FHA vs. jumbo vs. ARM)
Estimate payment ranges with today’s pricing
Build a plan for pre-approval, offer strategy, and timing

If you want a personalized payment breakdown based on your credit score, down payment, and price range, reach out and we’ll map out the best path to get you into the market before spring competition potentially heats up.