Mortgage rates have moved back to roughly 7%. Freddie Mac's weekly average for the 30-year fixed reached 6.95% for the week ending September 17, while daily lender trackers put rates above 7%. The Federal Reserve also raised its benchmark rate this week, its first increase in three years. The Fed doesn't set mortgage rates directly. They follow long-term bond yields, and the 10-year Treasury recently reached its highest level in nearly two decades. NAR's chief economist expects rates around 7% to become more typical for now.
For Santa Clara County buyers, the useful question is what that does to a payment and to negotiating leverage.
What 7% costs at local prices
The median single-family home in Santa Clara County sold for $1,850,000 in August, down about 1.6% from $1,880,000 a year earlier. With 20% down, that means a loan of about $1.48 million. At 6.5%, principal and interest comes to roughly $9,350 a month. At 7%, it is roughly $9,850. That is about $490 more per month, or nearly $6,000 a year, on the same house.
The same shift changes buying power. A buyer who wants to hold the payment at about $9,350 can afford roughly $90,000 less home at 7% than at 6.5%.
Loans of this size also sit above the conforming limit. The 2026 ceiling in high-cost counties is $1,249,125. That means many local purchases are jumbo loans, priced lender by lender. The national average is a starting point, not a quote.
What the local market is doing
Santa Clara County single-family data for August:
- Median price: $1.85 million, down about 1.6% from $1.88 million a year ago.
- Closed sales: 642, down from 730 last year
- Active listings: 986, up from 798 last year
- Months of supply: about 57 days of inventory, up from 45 a year ago but well below the long-term average
- Sale-to-list price ratio: 102.8%, with homes going into contract in about 14 days.
Buyers have more choice and less urgency than a year ago, but this is not yet a buyer's market. On average, homes still sell above asking. Condos are softer. The median condo price is down 9.2% year over year, with listings up about 8.4% and roughly 26 days to contract.
Where buyers can find leverage
- Negotiate beyond price. Higher rates can cool demand. A lender quoted by NAR notes buyers may be able to ask for seller credits toward closing costs or use them to fund a temporary rate buydown, though leverage is smaller where inventory is tight. Locally, that is most realistic on condos and on homes that have sat past the typical 25 days.
- Compare lenders. A LendingTree analysis found the borrowers with the lowest rates averaged a 5.52% APR versus 6.15% for others, and nearly all of them collected at least three offers. At Silicon Valley loan sizes, a gap like that is worth several hundred dollars a month.
- Underwrite to today's payment. Rates have pulled back briefly before, and a refinance may be possible later. Buy a payment you are comfortable with now, and treat any future refinance as a bonus.
A note for sellers
Higher rates make some buyers more payment-sensitive, and more inventory gives them alternatives. Well-prepared, well-priced homes are still drawing offers at or above list. Seller-funded concessions can be an alternative to a price reduction, and which works better depends on the property and the buyer.
In conclusion
Rates near 7% make the monthly math harder, but local conditions are more balanced than they have been in some time. Whether that helps you depends on the price point, the neighborhood, and the financing.
If you are weighing a purchase or sale this fall, The Pulpan Brothers Group can run the numbers for your situation. Reach out to our team to start the conversation.
