What Sellers Can Do To Attract Buyers In The Current Interest Rate Market

One of the biggest challenges facing home buyers today is not necessarily the price of the home—it is the monthly payment. That distinction is important for sellers to understand. Mortgage rates moved higher again in September. Freddie Mac reported the average 30-year fixed mortgage at 7.03% as of September 24, while the Mortgage Bankers Association reported an average contract rate of approximately 7.30% for the week ending September 25. For buyers already dealing with higher home prices, insurance premiums, property taxes and everyday expenses, rates above 7% can significantly affect affordability.

Why Mortgage Rates Remain High

Inflation continues to be a major factor. The Consumer Price Index increased 3.4% over the 12 months ending in August, while gasoline prices rose 3.9% during the month. The ongoing conflict involving Iran has also created volatility in global energy markets, with oil prices rising sharply amid concerns surrounding Gulf oil supplies and the Strait of Hormuz. Higher energy costs can increase transportation, manufacturing and shipping expenses, creating additional inflationary pressure throughout the economy. While the Federal Reserve does not directly set mortgage rates, mortgage rates are heavily influenced by longer-term Treasury yields and expectations for future inflation. When investors believe inflation may remain elevated, mortgage rates can remain higher as well. For that reason, buyers should probably not make a purchase decision based on the assumption that mortgage rates will fall substantially in the near future.

Buyers Are Feeling the Impact

Higher borrowing costs are already affecting buyer activity. According to the Mortgage Bankers Association, total mortgage applications fell 6% during the week ending September 25, while applications specifically for home purchases fell approximately 4% in one week and were 14% below the same period a year earlier. That does not mean buyers have disappeared. People buy homes in every market. They relocate, get married, have children, retire, downsize, move closer to family, purchase second homes and invest. What changes is how they make their decisions. Today's financed buyer is more focused on monthly payment, more selective about the homes they consider and often more sensitive to price and condition. Sellers need to adjust their expectations and strategies accordingly.

Seller Concessions Can Help

One strategy sellers should consider is offering a seller concession to help a buyer reduce their mortgage interest rate. Instead of simply lowering the purchase price, a seller may contribute money toward the buyer's allowable closing costs or a mortgage-rate buydown. Depending on the loan program and lender guidelines, those funds may be used for either a temporary buydown or a permanent rate buydown.

Temporary Buydowns

A temporary buydown reduces the buyer's payment during the first few years but does not permanently change the mortgage rate. A common example is a 2-1 buydown. If the actual mortgage rate is 7%, the first-year payment might be calculated as though the rate were 5%, the second year at 6%, and then the buyer begins making the full 7% payment in year three. This can give buyers some breathing room during the first few years of homeownership. However, buyers should never assume they will simply refinance before the temporary buydown expires. They should be comfortable making the full mortgage payment if rates do not decline.

Permanent Rate Buydowns

With a permanent buydown, the seller's concession can instead be used to purchase discount points that permanently reduce the buyer's mortgage rate. One discount point generally equals 1% of the mortgage amount, although the actual rate reduction varies by lender and market conditions. For buyers planning to remain in the property for many years, a permanent rate reduction may provide greater long-term value. Buyers should ask their lender to compare the monthly payment and total cost of each option before deciding how best to use a seller concession.

Think About the Buyer's Monthly Payment

This is where today's market requires sellers to think a little differently. Price, condition, presentation and marketing remain extremely important. But financing can also become part of the marketing strategy. For example, principal and interest on a $400,000 mortgage at 7% is approximately $2,661 per month. At 6.5%, the payment falls to approximately $2,528, a savings of about $133 per month before taxes and insurance. The cost of obtaining that lower rate will vary, but it illustrates why today's buyers are so focused on financing. A seller already considering a price adjustment may want to discuss whether some of that money could instead be offered as a concession toward buyer closing costs or an interest-rate buydown. In some situations, lowering a buyer's monthly payment may be more compelling than simply lowering the asking price.

Buyers Still Buy in Every Market

We have experienced markets with extremely low interest rates, double-digit rates, bidding wars and periods when buyers had considerably more negotiating power. Homes sold in all of them. The question is not whether buyers are still buying—they are. The question is whether sellers are willing to adjust to the market those buyers are experiencing today. With mortgage rates around 7%, continued inflation concerns and uncertainty surrounding energy prices, sellers should not simply wait for lower interest rates to solve the affordability problem. Thoughtful pricing, realistic expectations and strategic use of seller concessions can help make a property more attractive to today's payment-conscious buyer. Sometimes helping a buyer solve the monthly-payment equation can be just as important as the asking price. Mortgage rates and economic statistics referenced are current as of September 30, 2026. Mortgage programs, allowable seller concessions and rate-buydown requirements vary by loan type, lender, down payment and borrower qualifications. Buyers should review specific options with their mortgage professional.