Interest Rates Are Cooked...

Rates are a mess right now. Not unprecedented, or historically high. But an actual mess. And I think you deserve some content where I don’t try to spin that.

The ceasefire we were cautiously celebrating two weeks ago is in pieces. Iran attacked three commercial vessels in the Strait of Hormuz earlier this week. The U.S. responded with strikes on 80 Iranian targets on Wednesday. The Treasury Department revoked Iran's temporary oil sanction waiver at midnight Tuesday. Crude oil surged back to $76 a barrel overnight - reversing a slide that had briefly brought prices back to near pre-war levels.

The 30-year fixed is averaging 6.49% per Freddie Mac's report this week - up from 6.43% last week. Sixty percent of rate-watchers polled by Bankrate this week expect rates to go higher in the days ahead. The CPI report drops Tuesday and a hotter reading could push Treasury yields up and drag mortgage rates with them.

So honestly? It might be time to mail in your plans on buying this year.  Stay with me.

What Actually Happened This Week

The peace deal that was signed June 19th in Switzerland lasted less than three weeks in any meaningful form. Iran attacked the Qatari LNG tanker near the Strait of Hormuz. The U.S. called it a violation of the MOU, revoked Iran's oil sales authorization, and launched strikes. Iran is now calling that a "blatant violation" of the agreement. The ceasefire is being described publicly as still technically in effect. The activity within Strait of Hormuz tells a different story.

Global oil output remained about 9.4 million barrels per day below pre-war levels, with supply on track to decline by an average of 3.7 million barrels per day in 2026, contingent on a swift de-escalation of renewed hostilities.

There was no swift de-escalation. I cannot emphasize enough the impacts of this on the entire supply chain.

On the housing data side: the National Association of Realtors reported on July 9 that the median price of existing homes rose to $440,600 in June, an all-time high. There were also 1.56 million homes for sale at the end of June, up only 1.3% from a year ago. Lawrence Yun said it plainly: "That is miniscule. We need to see 30%, 40% growth in inventory. We're not seeing that."

Prices at an all-time high. Inventory barely moving. Rates inching up. And a war that was supposed to be winding down that just re-escalated.

I understand if you’re not enjoying my update today, stay seated.

The Honest Affordability Conversation

Let me not skip past the part that is genuinely hard.

At 6.49% on a $440,600 median-priced home with 10% down, you are looking at a principal and interest payment of roughly $2,670 a month. Add property taxes, insurance, and PMI and you are realistically at $3,200 to $3,500 depending on your market.

That is real money. For a lot of households that number does not work. And I am not going to tell you it does if it doesn't.

The first-time buyer who is making $85,000 a year in a market where homes are $440,000 is not failing at life. They are up against a structural problem that has been building for thirty years and that one peace deal and one housing bill --which still hasn't been signed by the way - was never going to fix overnight.

Affordability is hard right now. That is a fact. Anyone telling you otherwise is selling something.

More than a monthly payment.

Homeownership has never been purely a monthly payment calculation. And I think somewhere in the last four years of rate obsession, we lost that thread.

When you own a home your housing payment is fixed. Your landlord cannot raise it. Your property manager cannot decide not to renew your lease. Nobody can price you out of your neighborhood after your kids have gone to school in that district since Kinder. The payment you lock in today - even at 6.49% - is the payment you make in 2031 (unless you choose to refinance) while your renting neighbors are absorbing their fifth housing expense increase.

Owning a home is stability in a world that is actively demonstrating it has no interest in being stable.

It is control. Over your walls, your floors, your dog, your lease terms, your future. The psychological weight of not having that - of living in a space where someone else holds all the cards - is something the monthly payment comparison almost never accounts for.  But it is something that has been studied.  Homeowners have better mental health.

It is also a financial safety net. Home equity is the number one source of wealth for American families. Not a 401k. Not a brokerage account. A house. The family that bought in 2019 at 4% and rode out 2020 and 2021 and sat on $180,000 in equity by 2023 did not get there by timing the market. They got there by being in it.

And right now - in a week where the geopolitical situation just reminded everyone how unpredictable the world is - owning something that is yours, that no one can take from you, that sits on land with a deed in your name, feels like something more than a financial instrument.

It feels grounding.

Okay Shivani, You Have an Angle

I know what some of you are thinking.

She is a mortgage lender. Of course she wants me to buy a house. She is not exactly a neutral party here.

Fair.

I am not going to argue with you. I am not here to convince anyone of anything. If the monthly payment does not work for your budget right now - do not do it. If the timing is wrong for your life - do not do it. If you genuinely believe you are better off renting for the next two years – you do you boo.

I am only here to guide you if you want the guidance.

What I will say is this: the people who have waited for the perfect moment to buy - perfect rates, perfect prices, perfect certainty - have largely waited through a decade of appreciation they did not capture. The people who bought when it was hard, when it felt uncertain, when the headlines were loud -- most of them are glad they did.

The world is not getting less complicated. The war that was supposed to end did not end. The housing shortage that was supposed to be fixed is not fixed. The rates that were supposed to come down have not come down.

Yet somewhere in your market this week there is a motivated seller, a negotiable price, and a home that could be yours with the right strategy.

Do with that information what you will.