Spring is officially here, and with it comes fresh starts, longer days, and open house signs blooming like tulips across neighborhoods. With mortgage rates holding around 6.88%, you might have expected the housing market to stay quiet.

But it hasn’t. According to HousingWire, lenders are reporting a noticeable rise in purchase applications and rate-lock activity. Translation? People aren’t sitting on the sidelines, and they’re finding smart, creative ways to buy now.

Let’s break down why buyers are still making moves and what that could mean for your homebuying journey.

Why Demand Is Rising, Even Without Lower Rates

Sure, today’s rates feel high compared to recent years. But the market hasn’t cooled, it’s just evolved.

Move-up buyers are leading the charge, using the equity they’ve built to upgrade or relocate to homes that better fit their lifestyle. With home values holding strong, that equity becomes real leverage.

Others are exploring loan options that keep monthly costs in check, like:

• FHA loans with low down payments and flexible credit requirements
• Adjustable-rate mortgages (ARMs) that offer lower initial payments (ideal if you plan to refinance or move in a few years)
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According to Optimal Blue, purchase loan locks rose 7.5% in April, proof that even in a higher-rate market, buyers are still finding ways to move forward.

What Could Shift Mortgage Rates This Year

If you’re wondering when (or if) mortgage rates will drop, you’re not alone. While the Federal Reserve is holding the federal funds rate steady for now, here are two wildcards to watch:

1. Tariff Adjustments

A potential trade agreement between the U.S. and China could ease tariffs on building materials. That might lower the cost to build a home by as much as $22,000, making new construction more accessible while also easing pressure on tight inventory.

2. Inflation Trends

Inflation dropped to 2.3% in April, which is the lowest level it’s been since early 2021. But it's still above the Fed’s 2% target. If inflation rises again, rate cuts may be delayed (or even reversed), keeping mortgage rates elevated.

Bottom line: Rates may stay bumpy. Focus on what you can control: your timing, your budget, and who’s in your corner.

Affordability Isn’t Just About Interest Rates

When budgeting for a new home, it’s easy to focus solely on the numbers. But today’s buyers are learning that monthly affordability goes deeper than just principal and interest rates.

Here’s what’s currently driving up costs and catching some buyers off guard:

• Property Taxes: The average bill has climbed to $4,172, a 2.7% jump from last year.
• Homeowners Insurance: Nearly 67% of homeowners saw their premiums rise in 2024, with younger buyers particularly wary about long-term affordability.

These costs are why more lenders are helping buyers look at the “true” monthly costs earlier in the process. That means factoring in taxes, insurance, HOA fees, and other recurring expenses. Because the earlier you know the full picture, the better decisions you can make moving forward.

What This Means for You as a Buyer

Yes, the market has its challenges. But buyers who stay flexible and plan ahead are still winning. You may be in a strong position if:

• You have equity to use as a move-up buyer
• You’re open to exploring options like FHA, VA, or ARM loans
• You’re budgeting for all monthly costs, not just your mortgage
• You’re working with a lender who helps you adapt to changing market conditions

At Luminate Bank, we’re seeing buyers win contracts, navigate tough markets, and take confident steps toward homeownership. Our clients are still winning, even in an environment that’s far from perfect.

Final Take: Don’t Wait for “Perfect,” Plan for What’s Possible

Waiting for the perfect time to buy? It may be time to rethink what perfect really means. For many, it’s not about the lowest rate—it’s about having the right plan, the right support, and the right home for your needs.

Thinking about buying this spring? Let’s talk.

We’ll help you explore your options, run the numbers, and make confident moves in today’s market. Let’s light the way forward. Your next chapter starts here.