Interest rates dominate conversations about buying a home right now. In the Detroit metro area, the housing market has softened modestly in recent months. For some buyers there, a fixation on rates may cost more than the rates themselves.
Anthony Kellum runs Kellum Mortgage, a Detroit-based mortgage company that also serves Atlanta. His argument is counterintuitive but grounded in basic math. When rates climb, prices often ease. A lower purchase price can sometimes produce a smaller monthly payment than a slightly lower rate on a more expensive home.
Kellum has watched this pattern play out across multiple rate cycles during his roughly 35-year career. He says the current market is causing buyers to focus so narrowly on rates that they wait while affordable deals pass them by.
The logic is straightforward. When rates rise, some buyers pull back. When buyers pull back, sellers have less leverage, and prices soften. A home that might have listed for more when rates were lower may now list for less. It may also sit on the market long enough for the seller to accept a lower offer.
Kellum argues that buyers who focus only on the rate miss this offsetting effect. “The price coming down is probably going to put you at a better payment,” he says. In his view, that lower price can outweigh a marginally lower rate on a home that costs more. The monthly payment depends on both price and rate. That payment is the number that determines whether a buyer can afford the house.
This does not mean rates are irrelevant. A higher rate increases the total interest paid over the life of the loan. Refinancing later to get a lower rate is never guaranteed. Kellum’s point applies to buyers who leave the market entirely because of rate headlines. It does not apply to buyers carefully weighing long-term costs.
Kellum’s bigger concern is psychological, not mathematical. He says buyer fear is growing, fueled by headlines that compare today’s market to the 2008 financial crisis.
He rejects that comparison: “I don’t think we’re remotely close to 2008.” He notes that underwriting guidelines, the standards lenders use to approve loans, have tightened in recent months rather than loosened. Deals are harder to close, not easier. That is the opposite of the conditions that came before the 2008 crisis.
Still, fear has real consequences. Buyers who wait for a crash may later pay the same price at a higher rate. They may also find a different selection of homes when they return. Fear does not pause the market. It only removes some buyers from it.
Kellum says the Detroit market has softened slightly. Prices have come down, and deals take more work to close. Industry contacts have also told him that some mortgage companies are cutting staff, which suggests loan volume has dropped.
None of this points to a collapse. Instead, it points to a market cooling from the fast pace of recent years. For buyers, that can mean less competition and more room to negotiate. Kellum says the moment calls for caution rather than retreat. “You can’t just focus on the interest rate,” he says. “You gotta focus on prices too.”
Detroit-area buyers deciding whether to act now or wait can run a simple comparison. First, calculate the monthly payment on a home at today’s price and rate. Then compare it with what the same home would have cost a few months ago at the rate available then. If today’s payment is similar or lower, rate headlines may be hiding a deal that lower prices have created.
About the Expert: Anthony Kellum runs Kellum Mortgage, with 35 years in mortgage banking, operating in the Detroit and Atlanta markets.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.
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