Mortgage rates are hovering near seven percent, putting added pressure on Houstonians trying to buy a home.
For some buyers, the higher rate is enough to pause their search. But housing experts say a higher rate does not necessarily mean homeownership is off the table.
There are down-payment assistance programs, grants and other financing strategies that could help qualified buyers reduce their upfront costs or lower their monthly payment.
Don’t assume you have to wait
A higher interest rate directly affects a buyer’s monthly mortgage payment, which can make an already expensive home even harder to afford.
Ariel Villarreal, a Houston-area real estate agent with Coldwell Banker, says some buyers respond by waiting for rates to fall.
But waiting could also mean missing opportunities in today’s market.
With more homes available and fewer buyers competing for them, Villarreal says buyers may have more leverage to negotiate with sellers. That can include asking for seller credits that can be used to buy down an interest rate.
“Reach out to a lender first,” Villarreal said. “They will give you a roadmap of what you need to do.”
That conversation can help a buyer understand their credit, debt-to-income ratio and overall financial position before they start looking at homes.
It can also reveal programs a buyer may not know exist.
Villarreal says those options can include grants, down-payment assistance and rate-buydown programs.
Harris County offers a major discount for some buyers
Harris County is also using federal disaster recovery funding to help some lower-income households become homeowners.
The county is developing single-family homes in north Harris County and offering eligible buyers a significant discount on the purchase price.
Thao Costis, executive director of Harris County Housing and Community Development, said the discount can be substantial.
“It can be up to 45%,” Costis said. “So we’re looking at potentially $140,000 of a discount.”
The program is aimed at households earning no more than 80% of the area’s median income.
According to the county, that means a family of four making about $83,000 or less, or a two-person household making about $66,000 or less, could potentially meet the income requirement.
The homes are located near Ella Boulevard and North 45.
The development includes about 60 homes, and Costis said only a handful had been applied for or spoken for at the time of the interview.
Buyers still have to qualify for a mortgage
The assistance does not mean buyers can skip the normal mortgage process.
Costis said buyers still have to qualify for financing through a lender. The amount of the discount depends on the household’s income, borrowing ability and other financial qualifications.
There is also a residency requirement associated with the discounted homes. Buyers who leave the home before the required period could have to repay a portion of the discount.
For buyers who don’t qualify for that specific program, other assistance may be available.
Costis said Harris County and the City of Houston have additional down-payment assistance programs, although funding and eligibility are limited.
What buyers should do
Experts say the first step should be finding out what you qualify for — rather than assuming today’s mortgage rates automatically make buying impossible.
A lender can review your finances and give you a clearer picture of your buying power. Buyers can also ask specifically about down-payment assistance, grants, rate buydowns and seller credits.
For Harris County’s discounted-home program, prospective buyers can search for the Harris County Housing and Community Development single-family homeownership program.
The county also recommends contacting local housing organizations for counseling and referrals. Costis said residents can also call United Way’s 2-1-1 service for help finding housing resources.
The message for buyers is simple: higher rates have changed the math, but they haven’t necessarily closed the door on homeownership.
The first step is finding out what options are actually available — and whether you qualify.
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