Every Wednesday night we go live to talk through what's happening in the housing market and answer questions from the audience. We're Jeb Smith, a real estate broker, and Josh Lewis, a mortgage advisor, and this recap pulls the useful answers out of our October 15, 2026 show so you can read them without watching the whole thing.
This week rates had climbed to roughly 7.45% after a hot inflation report, so most of the questions circled around what's driving rates and how buyers should respond. Below you'll find our answers on when rates might drop, construction-to-permanent loans, whether a 1-0 buydown is worth it when you plan to refinance, and whether pulling a permit will raise your property taxes.
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Build my Roadmap →Rates are most likely to drop once inflation shows a clear path back down, and right now inflation is the driver, not employment. Back in late February and early March, inflation was running around 2.3% to 2.4% and trending in the right direction, and the 10-year was low enough to put rates just under 6%. Then conflict in the Middle East and disruption around the Strait of Hormuz pushed oil higher, oil worked its way into everything else, and rates have climbed more or less steadily since.
The latest CPI report (as of 10/15/2026) came in at 3.7% headline year over year, with the core reading surprising to the upside. The Fed's 2% target is a long way off, and the market now sees a high chance of one and possibly two more Fed hikes. The honest answer is that we need an end to the war, some transparency on how long this inflation runs, and lower oil and diesel prices before yields moderate. The market hates a lack of transparency, and that uncertainty is what's creating the volatility you're feeling.
For most people, especially first-time buyers, a construction-to-permanent loan is not the first place we'd steer you, but it can make sense when you're building on land rather than buying a finished home. Construction-to-perm is generally for raw land and a new build; if you were buying a home with deferred maintenance that needs rehab, that's a different product, a rehabilitation loan.
The thing to remember with any construction project is that it has a way of costing more than you planned and taking longer than it should. The upside of construction-to-perm is that it converts into permanent financing, so you don't face a balloon payment you have to pay off later, and that permanent loan sets a worst-case rate for you. You'd still have the same option every other buyer has to refinance if rates improve. Because the details here matter a lot (the property, the total budget, your familiarity with construction and timelines, whether you have a builder lined up), this is exactly the kind of situation we walk through during the Roadmap process with Josh and his team, who serve borrowers in 35 states through United American Mortgage Corporation.
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Get my readiness score →It depends on the structure, and the key is to never count on a future refinance to make the math work. A listener had negotiated a seller credit and was deciding between a 1-0 buydown (1% lower rate for the first year only) and using that money elsewhere, planning to refinance in one to two years. A full 1% permanent reduction typically costs three and a half to four points, which is a very large concession; a 1-0 is cheaper because it only covers year one.
Here's the trap with "I'll just refinance." Planning to refinance requires the market to cooperate. If a full 1% lower rate saves you about $2,000 a year and a refinance costs you $3,000, that's a year-and-a-half break-even even if rates fall a full point from here, which isn't guaranteed. We'd rather lay out a side-by-side comparison: a temporary buydown (biggest monthly savings for the shortest time), a permanent buydown (savings for as long as you hold the rate, but a sunk cost if you refinance), covering all closing costs, or taking a lower purchase price so you have more equity when you sell. Remember that buying down the rate costs roughly the same as what it saves you; sometimes that money is better as a price cut or sitting in your bank account so you keep your powder dry. We'll never tell you which is right because we don't know your comfort level, but you should walk away understanding the pros and cons of each. That optimal structure is what we work through during the Roadmap process with Josh and his team.
Yes, and right now we're seeing concessions we haven't been able to get for buyers in several years. Inventory is moving sideways at a time of year it would normally decline, homes are sitting longer, and roughly 30% to 40% of listings are offering some kind of price cut or concession. That gives qualified buyers real negotiating room.
Recent closings tell the story: a listener in Georgia got concessions, a buyer in Florida had nearly all closing costs covered, and two buyers in Colorado came in under asking and got significant concessions, including after a post-inspection round of negotiations. One of those buyers is getting a 1-0 buydown on top of all closing costs paid, which on a $625,000 loan is meaningful. Jeb even negotiated a deal where the seller paid off an entire solar lease before closing. The caveat: this isn't broad-based, and your mileage will vary. Desirable homes at affordable entry-level price points are still drawing multiple offers, so a nice home that's underpriced can still sell well over asking. And none of this means you should buy just to buy. The right time is still about your life: money in the bank, comfort with the payment, and job, relationship, and financial stability.
Pulling a permit by itself generally won't trigger a reassessment; completing the work and getting the permit finalized can affect your tax basis, but for most projects the increase is small. This varies by state, so confirm with your local assessor, but in California the act of pulling a permit alone doesn't reassess your property.
When the work is finished, assessors typically don't add the full cost of the project dollar for dollar. Josh added a pool that cost around $125,000 and was reassessed for about $30,000. Another homeowner tore a house down to one wall and rebuilt a custom home worth roughly three times the original, and the assessed value went up about 25%. So unless you're doing something large like a major room addition, a big ADU, or a pool, you're usually looking at a modest increase, often a few hundred dollars a year or less. The assessor tends to take it fairly easy compared to what people fear.
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