If you’re thinking about buying a home in the next few months, or even a year from now, one of the biggest question marks may be the mortgage rate you’ll actually get.
Mortgage rates can move significantly over time, and that uncertainty can make it difficult to know how much home you should realistically be shopping for. A recent Realtor.com study offers a useful way for buyers to plan for that uncertainty without letting changing rates completely derail their housing budget.
Plan for a Range, Not a Single Rate
Rather than assuming today’s mortgage rate will still be available when you’re ready to buy, Realtor.com recommends building some flexibility into your budget based on how far away your purchase may be.
Researchers looked at historical changes in 30-year fixed mortgage rates since 2000 and developed ranges that captured roughly 80% of historical rate movements:
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12 months before buying: Plan for today's rate to move up or down 1 percentage point
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6 months before buying: Plan for a movement of up or down 0.75 percentage points
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3 months before buying: Plan for a movement of up or down 0.50 percentage points
The closer you get to purchasing, the narrower the range becomes.
What Could That Mean for Your Purchasing Power?
Mortgage rates can have a surprisingly large effect on how much you can borrow while keeping the same monthly payment.
For example, using a 30-year fixed mortgage rate of 7.19% reported on September 22 as a starting point, a buyer planning to purchase in 12 months could consider a potential range of approximately 6.19% to 8.19%.
For someone with a $2,000 monthly principal-and-interest budget, that range could translate into a substantial difference in purchasing power:
| Purchase Timeline | Potential Rate Range | Approx. Loan Range* |
|---|---|---|
| 12 months | 6.19%–8.19% | $268,000–$327,000 |
| 6 months | 6.44%–7.94% | $274,000–$318,000 |
| 3 months | 6.69%–7.69% | $281,000–$310,000 |
*Approximate figures based on principal and interest only; taxes, insurance, HOA fees and other housing costs are not included.
In other words, a buyer who waits a year could potentially see their purchasing power change by nearly $60,000 based solely on where mortgage rates land.
That doesn't mean rates will actually move within these ranges. It simply demonstrates why planning around a single rate can leave buyers vulnerable to surprises.
What If You’re Comfortable With More Risk?
The study also calculated narrower ranges that historically captured about 50% of mortgage-rate outcomes:
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12 months out: today's rate ± 0.40 percentage points
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6 months out: today's rate ± 0.30 percentage points
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3 months out: today's rate ± 0.20 percentage points
This approach may make sense for buyers who are comfortable with a little more uncertainty. But the important takeaway is that your homebuying budget shouldn't necessarily be based on today's rate alone.
This Is a Planning Tool, Not a Prediction
It's important to understand what this study does and doesn't tell us.
Realtor.com's research isn't predicting where mortgage rates are headed. Instead, researchers examined historical mortgage-rate movements to give buyers a framework for thinking about potential changes.
Mortgage rates are influenced by a wide range of economic factors, and future movements are difficult to predict. Even economists who expect rates to eventually move lower acknowledge that the timing and extent of any decline are uncertain.
So, What Should Homebuyers Do?
If you're planning to buy in Western North Carolina, consider talking with a lender before you begin seriously shopping. Instead of asking only, “How much can I qualify for?” ask:
“What happens to my payment and purchasing power if the rate is 0.5%, 0.75% or 1% higher?”
Understanding those numbers can help you establish a comfortable price range rather than shopping at the very top of what you can afford.
And remember: the mortgage payment isn't the whole housing budget. Property taxes, homeowners insurance, HOA dues, maintenance and other ownership costs should all be considered when determining what feels comfortable.
Interest rates will continue to change. Your goal as a buyer doesn't have to be predicting what they'll do. Your goal can simply be making sure you're financially prepared for several possible scenarios.
If you're considering buying a home in the next few months or even next year, we're happy to help you think through the process, understand the local market and connect you with the right lending resources so you can make decisions with a little more confidence.