They Said “Marry The House, Date The Rate”
When interest rates started rising in 2022 and kept climbing through 2023, a common phrase began circulating in real estate and lending circles: “Marry the house, date the rate.” The message? Go ahead and buy the house now, even if the rate is high, because you’ll refinance soon enough when rates drop.
I never believed in that advice. And unfortunately, we’re now seeing the consequences for buyers who did.
Mortgage Rates Aren’t Dropping Like People Hoped
According to a recent Wall Street Journal article, most of the 7.5 million households with mortgage rates of 6.5% or higher took out those loans since 2022. These buyers expected rates to drop, just as they had during past economic cycles. But that hasn’t happened.
Rates haven’t dipped below 6% since September 2022, and today’s average 30-year fixed mortgage rate remains above 6.6%. That’s left many homeowners stuck with the higher monthly payments they thought they would soon escape.
In some cases, homeowners are now trying to sell their homes because the burden is too great. Others are realizing that refinancing is no longer an option due to declining home values, rising insurance premiums, or income limitations.
There Are No Guarantees on Rates
The biggest issue with “date the rate” thinking is that it assumes a predictable future. But the economy is unpredictable. I saw it firsthand during COVID, and I’ve seen it again in the past few years. Mortgage rates are not temporary unless you know for certain they’re going down, which no one can guarantee.
Some of my clients who bought with the expectation of refinancing are now realizing they’ll be paying their original high rates for years to come. And that’s assuming they can even afford the payment long-term.
Why Some Buyers Won’t Be Able to Refinance
Even if mortgage rates do drop in the future, refinancing isn’t a sure thing. Homeowners must qualify again based on current home values, income, debt, and other underwriting criteria. That’s where the risk lies.
If you bought during a peak and home values decline, your loan-to-value ratio may no longer qualify you for a new mortgage. You might owe more than the house is worth or not have enough equity to justify a refinance. In that case, the bank simply won’t approve the new loan.
This is especially concerning in areas where property values are already falling like parts of Texas and Florida, as the WSJ article notes.
So What Should Buyers Do?
Buyers today need to plan for the long haul. That means:
- Buying only if the monthly payment works at today’s rate don’t fall for the “date the rate” talk
- Assuming the current rate will be the rate for the foreseeable future
- Viewing any future rate drop as a bonus, not a bailout
If the numbers do not work now, don’t stretch in the hopes that refinancing will save you later. That approach could leave you house-poor or even at risk of being underwater on your mortgage.
What If You’re Already in a Tough Spot?
If you already own a home with a high-rate mortgage and you’re struggling, here are a few things you can consider:
1. Recast your loan. If you have a lump sum of cash, you may be able to make a large principal payment and recast your mortgage to reduce monthly payments.
2. Consider an ARM or balloon refinance. Some homeowners are turning to adjustable-rate or balloon mortgages to get short-term relief, though these come with risks if rates stay high.
3. Rent the home. If selling isn’t an option, you may want to rent out the property until the market improves. Just be prepared for a recovery timeline that could be three to seven years.
4. Talk to your lender. If your home is worth less than you owe, and you need to sell, it’s worth talking to your mortgage servicer about the possibility of a short sale.
What Is a Short Sale?
A short sale happens when you sell your home for less than the amount you owe on your mortgage and the lender agrees to accept the reduced amount as full payment.
Short sales typically require:
- Proving financial hardship (like job loss or medical bills)
- Documenting that the home cannot sell for what’s owed
- Cooperation from the lender, which can take time
Short sales can be an option to avoid foreclosure, but they also come with credit consequences and may require approval from multiple lien holders if you have more than one loan.
If you’re exploring this route, talk to an experienced real estate agent and consult a housing counselor or attorney to help guide you through the process.
The Bottom Line
Don’t buy a home today with the idea of “date the rate” if your only plan is to refinance later. Buy based on what you can afford today at today’s rate. And if you’re already in a tough spot, know that you’re not alone. There are options, but they require planning and the right support.
Need help navigating your next steps? I can connect you with a trusted real estate agent or financial professional in your area who understands the market and can help you evaluate your options.
