Tips to make your home purchase more affordable

Northern Wasatch Association of Realtors Advice

Stephanie Taylor
2022 President, Northern Wasatch Association of Realtors

With mortgage interest rates surpassing 6% for the first time since 2008, home buyers are spending more of their budgets on financing costs. In fact, Ted Jones, Stewart Title chief economist, recently told Utah Realtors that his top long-term concern for the housing market is affordability. 

While higher borrowing costs have sidelined some buyers, there are new advantages for the house-hunters who remain. Conditions that were unheard of six months ago — like seller concessions, price reductions and greater housing selection — are becoming much more common. 

Buyers are also using homeownership to avoid rent increases, which rose at the highest pace in nearly four decades, according to the Bureau of Labor Statistics. In fact, 60% of renters had the price of their home increase in the past year, according to a Freddie Mac survey.

“Rent prices look to accelerate in the near term as rental demand remains exceptionally high from ongoing job additions and higher mortgage rates forcing people out of the home-buying market,” said Lawrence Yun, chief economist of the National Association of Realtors.

Nadia Evangelou, NAR senior economist and director of forecasting, explains that even though buyers may spend more than renters initially, a buyer may end up spending less in the long run.

“[T]he monthly mortgage payment remains the same during the loan period,” Evangelou said. “However, if rents rise about 5% for the next couple of years, these buyers will have to pay about $100 extra for their rent than their current monthly mortgage payment.”

If you’d like to take advantage of today’s home-buying benefits but are uneasy about the current interest rates, here are some steps you can take to lessen the impact: 

Shop for a mortgage

Residential lending is expected to fall 46% this year and 6% next year, according to Jones. 

With lenders competing for your business, make sure to shop around to get the lowest price. Get bids from a variety of lenders and compare both interest rates and fees.

“Not only are mortgage rates rising but the dispersion of rates has increased, suggesting that borrowers can meaningfully benefit from shopping around for a better rate,” said Sam Khater, Freddie Mac’s chief economist. “Our research indicates that borrowers could save an average of $1,500 over the life of a loan by getting one additional rate quote and an average of about $3,000 if they get five quotes.”

Also ask lenders for information about special loan programs that offer discounted rates, grants and down payment assistance to first-time buyers, veterans, law enforcement officers, etc.

Consider an adjustable-rate mortgage

Adjustable-rate mortgages (ARMs) are seeing a resurgence as people look for more affordable mortgage options. For example, as of Sept. 15, the rate on a 5-year ARM was about one percentage point lower than the rate on a 30-year fixed-rate mortgage, according to Freddie Mac. 

Although this is a riskier option, as payments can increase after the initial term, some borrowers are choosing this loan because they don’t expect to be in the house over the long term. Others expect rates to decrease in the next few years and intend on refinancing should rates drop. 

Try co-borrowing

A recent Freddie Mac study found that the percentage of 25- to 34-year-olds using a co-borrower age 55+ spiked in 2021. 

When a family member or friend co-signs on the loan or purchases the home as a co-borrower, the combination of incomes helps the buyer afford more. This is becoming popular among millennials and their parents.

Co-buying real estate is also becoming more common among friends who join forces to buy real estate which would have otherwise been unaffordable. 

Negotiate with the seller

With a cooling market, sellers may be more willing to negotiate. In fact, some sellers are offering to buy down the buyer’s mortgage rate to help make lending costs more affordable. Some sellers may also be willing to accept a lower price or pay the buyer’s closing costs.

Talk to a local Realtor about current market conditions and what concessions you can expect in the current market. To find a Northern Wasatch Realtor, visit