Mortgage Rates Are Above 7%. Is It Better to Rent or Buy a Home Right Now?
Mortgage rates remaining above 7% have driven the United States housing market into a deep freeze, forcing buyers to weigh renting against purchasing as home sales slump. Pending home sales dropped 7.3% in September, hitting a new low as prospective buyers cancel sales at near-record rates. While homebuyers gain negotiating advantages in dozens of cities, high borrowing costs continue to suppress demand and push home prices lower in select regions.
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- ✓ Mortgage rates remain above 7%.
- ✓ Pending home sales decreased 7.3% in September.
- ✓ Homebuyers are canceling sales at near-record rates.
- ✓ High inflation and competition for investor dollars are keeping longer-term interest rates elevated.
What changed
Pending home sales fell 7.3% in September according to the National Association of Realtors, driving the housing market deeper into a freeze.
Live updates
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Mortgage Rates Push Past 7% As Housing Market Freezes
Mortgage rates remaining above 7% have driven the United States housing market into a deep freeze, forcing buyers to weigh renting against purchasing as home sales slump. Pending home sales dropped 7.3% in September, hitting a new low as prospective buyers cancel sales at near-record rates. While homebuyers gain negotiating advantages in dozens of cities, high borrowing costs continue to suppress demand and push home prices lower in select regions.
Why it matters
High inflation and fierce competition for investor dollars are keeping longer-term interest rates elevated, solidifying borrowing costs above 7% as the new normal for buyers. Although mortgage rates near 7.5% have historical precedent going back to the 1970s, buyers face severely diminished affordability today. Economists and housing analysts are closely tracking these pressures to determine if renting remains the financially sounder choice.
What is confirmed
- Mortgage rates remain above 7%.
- Pending home sales decreased 7.3% in September.
- Homebuyers are canceling sales at near-record rates.
- High inflation and competition for investor dollars are keeping longer-term interest rates elevated.
Still unconfirmed
- Mortgage rates above 7% are shifting the financial calculus to make renting definitively better than buying across most regional markets.
What to watch next
- Monthly changes in pending and existing home sales data
- Further shifts in regional home prices driven by elevated borrowing costs
- Economic updates regarding inflation and long-term interest rate trends
confidence 95%Sources used for this update (13)
- realestatean.com — Rent vs. Buy in 2026: A Data-Driven Analysis | RealEstatean
- CNBC — September data shows housing market in a deep freeze
- The Economist — Why Americans have stopped buying new homes
- Yahoo Finance — Homebuyers are canceling sales at near-record rates
- Fox Business — Homebuyers get an advantage in dozens of US cities — but pay a steep price
- The New York Times — Mortgage Rates Remain Above 7%, Pushing Home Prices Lower in Some Areas
- Morningstar — Mortgage Rates Are Above 7%. Is It Better to Rent or Buy a Home Right Now?
- marketplace.org — 7.5% mortgages have been the norm since the 1970s. Here's why they feel less affordable today.
- Deseret News — Pending U.S. home sales hit a new low
- National Association of REALTORS® — Pending Home Sales Decreased 7.3% in September
- www.cnbc.com — Mortgage rates above 7% are the 'new normal'—here's ... - CNBC
- www.which.co.uk — Best mortgage rates & deals October 2026 (UK) - updated daily - Which?
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