Ah, the whirl of the holidays: glitzy consumerism, friendly gatherings, and inklings of resolutions to come. With the headlines around market changes coming in 2026, anticipation of lower interest rates has many folks wondering how best to tackle next year’s housing market. While your own situation is of course personal and unique, there are a few general tips that anyone can implement for success.
Are you looking to refinance? Maybe you married the house and have been patiently dating the rates since they shot up in 2022. Refinancing means that you do the entire mortgage financing process all over again. Your income, credit, assets, and property are all reanalyzed based on today’s standards and terms. Expect to answer questions you may have already thought put to bed, and provide paperwork you may have already uploaded.
There are two primary reasons to refinance: For some, it is simply a lower payment; for others, it is a lower interest rate. (And, yes, everyone would love both!) Be careful if you are dropping your rate and starting your mortgage term all over again; you might not actually be saving money over the long run. However, if you can drop your rate by one percent AND reduce the term of your loan with your new payment structure, then you are winning for sure. If your aim is to be mortgage-free quickly, it may even make sense to keep your payments to accelerate payoff. Otherwise, you might want to consider taking any monthly savings and allocating it toward other savings methods — such as maximizing your retirement account or getting rid of other consumer debt.
If you’re looking to purchase this year, remember that demand moves faster than supply. A rule of thumb is that we qualify for 10 percent more in home price for every one percent reduction in interest rate. So, as folks can qualify for more, or simply achieve a payment that “feels better,” expect more competition. While we don’t expect the run on appreciation that we saw over 2020 and 2021, having a plan in place is going to be more key in 2026 than the past few years.
Lastly, it can still be more beneficial to make a higher monthly payment than to save for the next down payment level. If $100,000 in real estate financed costs around $650 per month, is it easier for you to save up more cash or make that higher payment? While no one should ever put themselves in a bad financial position by extending past their means, it may take a bit of time outside of your comfort zone to get ahead. Knowing your parameters and planning with a professional is key, even as bots get better and better at processing data.
Every year brings new hopes, demands, and expectations. As we head toward a declining rate environment, it will be even more key to move strategically with data on hand and clear goals defined. Take stock, ask questions, and be open, and I hope the season’s festivities bring cheer to your doorstep in the coming year.
Austin Lampson is a licensed mortgage professional and branch manager of Origin Point Mortgage. She has spent the last quarter-century helping her clients balance math and emotion to achieve their financial goals. Reach Austin at (805) 869-7100, austin@austinlampson.com, or visit austinlampson.com.
