Last week, Freddie Mac reported the biggest weekly drop in 30-year fixed mortgage rates in a year, from 6.50% to 6.35% in the September 11 PMMS. As a result, buyer activity is increasing: mortgage applications jumped in early September as rates eased.
More buyers enter the market when market rates dip, helping demand broadly. But buyers don’t just shop the list price; they shop the monthly payment. That’s why the rate on the buyer’s loan matters so much.
However, a fluctuating market can cause some buyers to hesitate as they hope to time another rate drop. This is where a specific subset of sellers have a stand-out advantage: those with assumable mortgages. An assumable mortgage is a type of home loan that allows a homebuyer to take over the existing mortgage terms from the seller. That’s where the edge comes in: the low-rate holds, even when the headlines and bond markets change. They offer a payment buyers can’t get with a brand-new loan, which makes the listing even more attractive as activity picks up.
And even with 30-year fixed rates dropping, the math still favors low-rate assumable mortgages. For example, on a $450k home, a 3% loan is $720/mo lower in principal and interest payments than a 6.35% loan, which translates into ~$260,000 savings over 30 years.
When properly marketed, that staggering difference drives buyer demand – resulting in more views, more tours, and stronger offers for the home.