Two sellers’ agents called me today a couple of hours apart to talk about two different houses. The houses aren’t even similar; different towns, different price points, different disclosure situations entirely. The only thing those two houses have in common is that they’re both about to drop significantly in price, one of them by six figures, and both agents were calling because they remembered I’d shown their listings to buyers back when the number on the sign felt too high. They’re hoping those buyers might look again now that the number has changed.
And, just like that, what used to be pretty rare happened twice in 90 minutes. It was basically what sellers have been doing all summer, condensed into two phone calls.
After nearly a decade of prices only moving in one direction, sellers are recalibrating, publicly and sometimes uncomfortably. I want to be clear that this isn’t a collapse. No doomsday headlines or fearmongering here, folks. Most of these sellers, especially anyone who bought before 2020, are still going to walk away from closing with more money than they put in, by a lot. But the number they had in their head, the one from last year, or from their neighbor’s sale in 2022, or from the appraisal during the refinance boom, isn’t the number anymore. And I don’t think it’s just sellers carrying around an outdated figure. Buyers are too. And, there’s an actively shifting conversation around interest rates, which I want to actually take apart, because I think it’s doing more to freeze people in place than the rate itself.
So, here’s a sentence I hardly ever write here, or anywhere. Let’s do some math! Here’s some nature, first, because I’ve found that numbers stress people out and nature does the opposite.
The rate isn’t the problem you think it is
That’s right, I’m saying it. Seven percent is not a calamity. Let’s do the math together. The thirty year fixed has been sitting close to seven percent this fall, up from the mid sixes for most of the last year. On a loan of four hundred fifty thousand dollars, the difference between six and a half percent and seven percent is around a hundred fifty dollars a month. That’s real money, I know. It’s also less than a lot of households spend on groceries every week, and it’s being treated like a wall instead of a line item.
Meanwhile, close to thirty percent of home purchases nationally are still happening in cash, no mortgage, no rate conversation at all. That share was closer to thirty five percent when rates were flirting with eight percent a couple years back, which tells you something: cash buyers show up in bigger numbers exactly when financing gets expensive, because for a real slice of the market, the rate was never the actual obstacle. It’s a signal. A lot of buyers are reading it as a flashing yellow caution light. A lot of others are reading it as a stop sign.
What about first time home buyers? Rent isn’t free either, but I definitely remember feeling like the known of my monthly rent was less overwhelming that thinking about mortgages and insurance and taxes and etc.. So let’s actually run a real comparison, because the version of this story people tell each other at dinner parties usually isn’t the real one.
Say you’re renting a two bedroom in Dover, paying somewhere around $2200 a month, which is about where that market sits right now. Say you qualify for a first time buyer loan, five percent down, and you’re preapproved for $500,000. Here’s the actual math, not the rounded down version. That’s a $475,000 dollar loan. At today’s rate, principal and interest alone runs around $3160 a month. Add property tax at New Hampshire’s average effective rate, another $750. Add insurance, call it $125. Add the mortgage insurance that comes standard with five percent down, another $275-$300. You land around $4300 a month. The gap between renting and buying is not insignificant.
I’d rather you know that than find it out on your first mortgage statement.
Here’s the equity side, run the same honest way. Two years in, you’ve paid down roughly $10,000 in principal. If the home appreciates at something like three percent a year, which is closer to what’s actually being forecast right now than the double digit years everyone still has stuck in their head, that’s another $30,000 or so in value. Sell at that point, pay a commission and closing costs, and you are not clearing $200,000. You’re close to breaking even against what you spent to own instead of rent, once you count the down payment and that extra $2200 monthly premium.
That’s the two year story, and it’s not a great one. But buying a house was never a two year decision, at least not until COVID. Which brings me to the couple I keep thinking about, because they didn’t get rich in year two either.
Say you bought a house here for $200,000 back in 2018, financed most of it at a rate that was, for what it’s worth, still north of four percent. That house is worth something in the neighborhood of $800,000 this fall. After paying off what’s left on the mortgage and covering the cost of selling, you’re walking away with something like $600,000. The math only worked because they stayed seven or eight years, long enough for the rent they would have paid instead to keep climbing the whole time, and long enough for appreciation and principal paydown to actually compound. So the honest version of “should you keep renting” isn’t a two year pitch. It’s a horizon question. Are you staying long enough for the math to do what everyone assumes it already does the moment you sign.
What “the market” actually means here
This is where I have to complicate things further, because “the Lakes Region market” isn’t one market. It’s several, wearing the same zip codes.
Right now, year round three and four bedroom homes between $400,000 and $650,000, the ones that don’t need a full gut before you can live in them, are moving quickly. That segment is carrying the region.
Waterfront on Winnipesaukee is its own animal, and it always has been. This year the median sale price on the lake was north of two million dollars, and those homes are sitting on the market more than four times longer than the region’s overall median. That’s not weakness, waterfront buyers move at their own pace, but it does mean “the market is hot” and “the market is slow” are frequently two people talking about two completely different products.
And then there’s the segment I think is most interesting: entry level and mid priced homes that need real work. A house priced at $450,000 that needs a new kitchen, new systems, maybe a full gut, is sitting. Not because buyers can’t afford $450,000. Because they can’t wrap their head around spending half a million and then writing a second, uncapped check to a contractor. That’s not a financing problem or an inventory problem, that’s a psychological one, and I don’t think the market conversation accounts for it nearly enough.
So the real answer to “is it a buyer’s market” isn’t yes or no. It’s which segment are you actually in.
What I don’t fully know yet: the Seacoast
I want to be honest about the fact that I’m newer to advising on the Seacoast than I am the Lakes Region, and I’d rather say that plainly than pretend otherwise. But the data tells the same “it depends” story in a different accent, and it’s worth laying out.
Single family homes there are still the most competitive piece of the market, well priced ones moving in under three weeks. Condos, especially waterfront units, run closer to a month and a half, strong demand, just a different pace. The luxury tier looks like our waterfront story in miniature, more patience required, closer to six weeks on market, buyers who aren’t in a hurry. And investment buyers are playing an entirely different game, they’re not chasing Portsmouth waterfront, they’re buying two and three unit properties in Rochester, Somersworth, and the Dover outskirts where the numbers still work. Vacancy along that corridor is sitting near four percent against a national average closer to seven, which tells you rental demand isn’t going anywhere.
Same complicated answer as the Lakes Region. Different air.
What this actually means if you’re deciding right now
If you’re a buyer who’s been sitting out because of the rate, run your own numbers instead of the headline. A hundred fifty dollars a month might change your answer. It might not, once you put it next to what you’re already paying in rent, or what another year of waiting might do to the price of the house you actually want, or how long you actually plan to stay once you buy it.
If you’re a seller holding onto a number from a year or two ago, I understand why. It’s hard to let go of a figure once you’ve said it out loud to your spouse, your kids, yourself. But the two calls I got today are the market telling you, gently, that the number has moved. You’re probably still going to do very well. Just maybe not at the number you were picturing.
If you’re thinking through what any of this means for you, I’m always happy to talk. Even if you’re just thinking out loud.
Here’s to running your own math instead of making decisions based on someone else’s headline.
🧭 Jennifer
Keys to the Lake
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