Interest Rate Update: How Current Shifts Impact Your Buying Power
How do current interest rate shifts impact your home buying power in NYC and Westchester?
Current mortgage rates, hovering in the low 6% range, offer significantly more buying power and lower monthly payments compared to the 7%+ peaks seen in previous years, allowing buyers to qualify for higher-priced homes.
The State of the Market in February 2026
As we move into the heart of the first quarter, the mortgage landscape is showing signs of stabilization. With national averages for a 30-year fixed mortgage currently around 6.29% according to Freddie Mac’s PMMS data, the “sticker shock” of the past two years is beginning to fade. In New York specifically, we are seeing competitive rates that are encouraging sidelined buyers to re-enter the market.
Buying Power: 7% vs. 6%
To put this into perspective, a 1% drop in interest rates can increase your purchasing power by roughly 10%. On a $1,000,000 mortgage, the difference between a 7.2% rate and a 6.2% rate is approximately $650 per month in savings. Over the life of the loan, that is over $230,000 in interest saved—money that could be better spent on renovations or invested elsewhere.
Inventory vs. Rates
While rates are moderating, inventory remains the primary challenge in Westchester and sought-after NYC pockets. Because rates have dipped, we are seeing a surge in demand. This means that while your payment might be lower, the competition for the right home is higher. It is more important than ever to have your pre-approval ready and a strategic offer plan in place.
Looking Ahead
The Federal Reserve has signaled a “wait-and-see” approach for the remainder of 2026. This stability is actually good news for the market, as it removes the volatility that makes buyers hesitant. If you have been waiting for rates to “crash,” you may find that the resulting price appreciation from increased demand offsets any further minor rate drops.
The “new normal” for rates is here, and it’s a far more favorable environment than we saw twelve months ago. Understanding your specific numbers is the first step toward making a confident move.
Want to see exactly how much home you can afford in today’s market? Check out the calculators on our buyer resource page or contact us for a personalized consultation.
