Mortgage Expert Says Elevated Rates May Actually Help Some Homebuyers

The Federal Reserve recently decided to leave benchmark interest rates unchanged after a 10-2 vote, according to a statement from the Board of Governors of the Federal Reserve System.

The Federal Open Market Committee said the economy continues to expand strongly. It noted that uncertainty remains high because of geopolitical developments, but domestic spending has held up, productivity is strong, capital investment is solid, and job gains have kept pace with the workforce while unemployment has changed little.

Still, many Americans had hoped for a rate cut to ease rising costs, especially prospective buyers who have been shut out of the housing market by expensive homes and higher mortgage rates.

One mortgage professional on TikTok, however, has argued that those high rates can be viewed as a positive sign, and she explained her reasoning in a post made before the vote.

A Mortgage Lender Says High Rates Signal Something Good

@theonithelender im just gonna say it #homebuying #mortgagerates #buyingahome #homebuyingtips ♬ original sound – Not Ur Daddys

TikToker @theonithelender said she knows it is an unusual thing to claim, but she called 7.5% mortgage rates a strong sign for the economy. She explained that mortgage rates are high because inflation is not easing as quickly as hoped.

According to her, the Federal Reserve’s main responsibility is to bring inflation back below 2%. She added that the central bank uses its tools to make borrowing more expensive, which can help slow inflation, but it does not directly set mortgage rates.

“So why is this a good sign if you’re trying to buy a house?” she asked. “Because we know they are doing their job.” In her view, persistently high rates show policymakers are doing what they are supposed to do to fight inflation, and once inflation reaches the target level, homebuyers could eventually see rates fall if the Committee lowers the federal funds rate.

She Says Buyers May Also Have Another Advantage

Although many would struggle to see the upside in higher borrowing costs, @theonithelender said buyers who can still afford a home may be getting a bonus from sellers.

She said she had not seen a contract come through her email in the recent past without sellers helping cover buyer costs through seller credits.

Commenters appeared to be less focused on the rates themselves and more concerned with how much home prices have climbed. One person wrote, “True, but a house that was $150,000 seven years ago is now $300,000.”

Another added, “Hear me out, rates stay where they are, and prices come down a ton.”

The Federal Reserve is not expected to decide on interest rates again until its next scheduled meeting.