Mortgage rates reached 7.28%. If you have to move right now, here are some tips.

The average interest rate for the popular, fixed-rate 30-year mortgage shot up to 7.28% this week, the highest it’s been since November 2023.

Elevated mortgage rates and high home prices are making homebuyers cautious about entering the market in the Philly area and beyond.

“They’re not jumping in with two feet,” said Patrick Lopez, a Philadelphia-based mortgage banker at Quaint Oak Mortgage.

At the same time, some people need to move. They’re driven by personal factors such as job relocations, growing households, and plans for the future.

Mortgage rates are unlikely to slide back down to pandemic-era levels of 3% or lower. And waiting for rates to drop significantly is often a losing game, Lopez said.

While interest rates fluctuate, home prices overall have historically moved in one direction: up.

“What I tell people is if you can afford it and you can buy, the least expensive the property is going to be 99% of the time was yesterday or today, because prices keep trending higher,” Lopez said.

When aspiring homebuyers tell him they are waiting for interest rates to drop into the 5% range, for example, he asks, “Do you also understand how many other people are waiting for that?”

A significant drop in rates would likely flood the market with buyers, increasing competition for properties.

Here’s what real estate pros are telling buyers now.

Individual mortgage rates depend on a bunch of factors, including credit scores and participation in homebuyer assistance programs.

“The good news is that people have more power over interest rates than they think they do,” said Matt Schulz, chief consumer finance analyst at LendingTree, an online loan marketplace.

Taking steps to get a lower rate, he said, “can make a really unaffordable situation a little less so.”

One of the first steps a homebuyer should take is to shop around to compare loan offers from several lenders, he said.

“People would be surprised how much difference there can be,” Schulz said. And even a slight difference in the interest rate can mean tens of thousands of dollars in savings over the life of a mortgage.

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Buyers with higher credit scores get lower mortgage rates, so improving those scores can help a lot.

“There’s very little in life that’s more expensive than having crummy credit, and that’s especially true when you’re buying a home,” Schulz said.

Jeffrey Ruben, the Bryn Mawr-based president of WSFS Home Lending, said that “first and foremost,” homebuyers should make credit card payments on time. They also need to control their credit card debt, so they’re not carrying over large balances from month to month.

They should cap how much they spend on a card to maximize how much credit they have available at any given time. Keeping total outstanding charges under 30% of the card limit gives people better credit scores, Ruben said.

Before buyers start looking at homes, they should sit down with a professional to determine how much they’re comfortable spending up front and monthly, said Peter Buchsbaum, manager of the mortgage brokerage Good Cents Financial, which is based in Bucks County and does most of its business in Philadelphia.

“Start the process earlier than you want to,” he said. “And it should begin with the financial piece.”

Schulz said homebuyers should factor in elevated mortgage rates when they calculate “what they can afford and what sort of homes they should be looking at and whether they should be in the market period.”

An increase in mortgage rate from 6.5% to 7% on a $300,000 home in Philadelphia would mean a monthly payment that grows by about $130, Buchsbaum said.

“If that’s stopping me from buying a house, I probably shouldn’t be shopping for houses,” he said.

Buyers should also look into assistance programs they may qualify for.

First-time homebuyer programs, such as those offered through the Pennsylvania Housing Finance Agency, can come with lower rates.

Households should go into home-buying with a plan for making their down payment, which can include saving more of their own money or getting grants or loans from governments, lenders, and nonprofits.

“The down payment is a challenge for many buyers,” Ruben said. “There’s no question about that.”

But buyers who can make bigger down payments get lower mortgage rates.

Rates can vary by location, so buyers with more flexibility in where they live can get lower rates.

Rates also can vary by loan type. Mortgages backed by the Federal Housing Administration and the U.S. Department of Veterans Affairs come with slightly lower interest rates than conventional loans.

Rates also vary by property type. Condos and duplexes come with higher interest rates than single-family homes, Lopez said.

With mortgage rates elevated, buyers should also keep in mind that a home they purchase now might not be their forever home, Schulz said. They may need to dial back their expectations and their budget in order to purchase.

First-time buyers, especially, can get on the first rung of the market ladder and start building home equity with the understanding that they can buy another home later that checks all their boxes.

“Tough times require compromise sometimes,” Schulz said.

Homebuyers shouldn’t jump on a low interest rate without question.

Recently, a homebuyer asked Buchsbaum whether he could match an interest rate of 6.5% for a mortgage the buyer saw online. But in the fine print, the buyer would have had to pay discount points, or up-front fees to a lender, to buy down the rate to that level.

The buyer didn’t know about that caveat.

Buyers can get mortgage rates down fairly low if they pay enough points, Buchsbaum said, but “the juice isn’t worth the squeeze” in many cases. Buyers have to weigh whether they’ll stay in their home long enough that savings will make up for the up-front expense.

Buyers who purchase homes now and get an elevated mortgage rate can pay to refinance their mortgage later if rates drop.

Also, more borrowers now are opting for adjustable-rate mortgages (ARMs) to get into homes, according to the Mortgage Bankers Association. These loans come with lower initial interest rates than fixed-rate loans. After a period of time, rates adjust up or down based on the market.

Ruben said seven-year ARMs for 30-year periods are currently popular among WSFS’s mortgage borrowers. The interest rate stays the same for seven years and can adjust twice a year after that.

There’s a reason borrowers get a better initial rate: “They are assuming the risk of potentially higher rates in the future,” Ruben said.

But Ruben said WSFS is hopeful that rates will drop over the next several years to pre-pandemic norms. Rates in the high-4% to low-5% range for 30-year fixed-rate loans weren’t uncommon, he said.

Mortgage rates aren’t likely to drop significantly anytime soon, thanks to surging energy prices, government debt, and inflation.

“It’s a really unfortunate situation because home-buying was already really unaffordable for an awful lot of people,” Schulz said.

WSFS tells mortgage borrowers “there are things they can control and there’s things that they can’t,” Ruben said. They can change their financial standing to some extent, but they can’t change broader market forces.

Buyers have to be realistic about their financial situations and the rates they’re likely to get, he said.

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