Buyers Gain Housing Leverage Even as Mortgage Rates Exceed 7%
About two-thirds of U.S. metros now favor buyers or are trending that way, but rising mortgage rates above 7% are eroding purchasing power.
Buyers are steadily gaining ground in the U.S. housing market, yet elevated mortgage rates topping 7% are offsetting much of that advantage by reducing what a fixed monthly budget can realistically afford, according to a new Realtor.com Market Clock Report released Monday.
Approximately two-thirds of metropolitan areas across the country now either favor buyers outright or are shifting in that direction, a notable change from the seller-dominated conditions that characterized much of the post-pandemic housing cycle. The geographic breadth of the shift suggests the trend is structural rather than isolated to a handful of cooling Sun Belt markets.
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Despite the more favorable negotiating environment, the affordability equation remains complicated. Mortgage rates above 7% directly compress purchasing power, meaning that even buyers who can extract price concessions or seller-paid incentives may find themselves locked out of homes they could have qualified for at lower rate environments. The practical result is that expanded leverage and diminished buying capacity are arriving simultaneously, creating a paradox for would-be homeowners.
Analysts note that the interplay between market clock positioning and rate-driven affordability constraints will likely define housing activity heading into the near term. Markets classified as buyer-friendly on paper may still see sluggish transaction volumes if financing costs keep monthly payments above what local incomes can support.
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