Mortgage Rates Hit 7%. Should You Still Buy a Home?
Mortgage rates have crossed 7% again. Freddie Mac reported that the average 30-year fixed rate reached 7.03% on September 24, 2026, up from 6.95% the week before.
If you’re hoping to buy a home, that number deserves your attention. But it shouldn’t make the decision for you. The question is whether you can afford the home, at the rate available to you, while still making progress on the rest of your financial goals.
A higher rate changes the payment
Suppose you borrow $320,000 with a 30-year fixed mortgage. At 6%, your principal and interest payment would be about $1,919 a month. At 7%, it would be about $2,129. That’s roughly $210 more each month, before property taxes, insurance, any mortgage insurance, and homeowners association fees.
That difference matters. A home that fit your budget a few months ago may no longer fit it today. Before you make an offer, calculate the full monthly cost using a current loan quote, including costs such as taxes and insurance when deciding what you can comfortably afford.
Don’t build your plan around a future refinance
You may hear, “Buy now and refinance when rates fall.” Refinancing could help someday, but no one can promise when rates will fall, whether you’ll qualify, or what refinancing will cost. Changes in your income or home value could prevent you from refinancing.
Buy only if the payment works now. If a lower rate comes later, treat it as an opportunity, not a rescue plan.
Look beyond the lender’s approval
A lender may approve a payment that leaves you feeling squeezed. Consider what you would have left each month for giving, saving, retirement, repairs, and ordinary life. Also consider what will remain in your emergency fund after the down payment and closing costs.
My usual guide is to aim for at least 20% down, keep the total housing payment below 30% of take-home pay, and plan to stay in the home for at least five years. Those guidelines may lead you to buy a less expensive home, save longer, or wait. They can also give you confidence when you find a home that fits.
Shop for the mortgage, too
The rate in a headline is an average, not your personal offer. Request Loan Estimates from multiple lenders and compare the rate, monthly payment, closing costs, and any discount points. A lower advertised rate can come with a higher upfront cost.
A 7% rate should affect what you can afford to buy. It doesn’t automatically mean you should stop looking. If the full payment fits comfortably, your savings remain healthy, and the home suits your plans for the next several years, buying may still be a sound decision. If the numbers work only because you’re counting on a raise or a refinance, give yourself more time.
A home should serve your life and your financial goals. Start with the payment you can carry, then look for a home within it.
