Why High Rates May Be the Best Time to Buy for VA-Eligible Borrowers

Written by:

Alejandra Rodriguez

Date:

02 Sep 2026

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The conventional wisdom in residential real estate, wait for rates to fall before buying, may be exactly backward for veterans and military buyers with access to VA financing. While much of the market sits frozen, waiting for relief, a different logic is playing out among borrowers who can access rates meaningfully below conventional levels and who understand what happens to inventory and pricing when mortgage costs decline.

The dynamic is straightforward: when rates drop even modestly, demand surges, inventory disappears, and prices climb. Buyers who lock in now at higher rates but lower prices can refinance later, a strategy familiar to investors but less commonly applied by owner-occupants.

“Right now it’s very advantageous when rates are high to buy, and then when rates drop, that’s when you refinance,” says Marty Medve, Co-Owner & Principal Broker at Trident Home Loans, a Florida-based lender licensed in 49 states where approximately 80% of volume is VA loans. Medve, who has held the top-ranked VA loan officer position on the Scotsman Guide for the past five years, says his firm currently quotes VA rates under 6%, while he recently saw a large bank quoting 6.99% on a conventional loan.

The Rate Gap as a Buying Advantage

The spread between VA and conventional rates creates a competitive edge that most buyers don’t fully appreciate until they see the numbers side by side. Medve describes a recent scenario: an airline captain client looking at a $1.2 million home in Virginia Beach. Conventional rates for that loan size sit above 6.5%. The VA rate comes in materially lower, and with zero down payment required.

“I told him, get it under contract as soon as you can,” Medve says. “He’s got about two or three months before rates drop, and once they do, there’s going to be so many buyers for that house that he’ll lose the opportunity.”

The client is offering $50,000 below asking, leveraging the soft market conditions that high rates have created. That negotiating power evaporates when borrowing costs fall and sidelined buyers flood back in. Medve saw precisely this pattern in February, when a modest rate dip pushed his firm’s application volume to 50 per day, roughly double the current pace of 25 to 30.

Florida’s Split Market

Florida’s real estate landscape is not behaving as a single market. In Miami, where transactions are more cash-driven than rate-sensitive, prices continue climbing as investment capital recycles; sellers who purchased a decade ago at $5 million are selling at dramatically higher prices and deploying proceeds northward through 1031 exchanges.

That capital is flowing into areas like Ocala, Orlando, and West Palm Beach, driving land purchases and new development. Meanwhile, primary-home markets along the Gulf Coast and in North Florida, Panama City Beach, Pensacola, Jacksonville, remain soft because they are rate-sensitive and builders have maintained supply.

“Unlike the Northeast and the Midwest, where they quit building, Florida kept building houses,” Medve says. “So we have an oversupply” in parts of the state, while northern markets face the opposite problem: limited inventory that will tighten further when rates decline.

What VA Borrowers Get Wrong

For first-time VA loan users, the most common mistake isn’t financial; it’s choosing a property that won’t pass VA requirements. Condos in South Florida present a particular challenge: they require a separate qualification process that takes approximately two weeks, and many in Miami-Dade and Fort Lauderdale won’t qualify due to budget reserve shortfalls, litigation, or structural issues.

“We want that buying agent to be out knowing that it might take two weeks to qualify the condo,” Medve says. Properties with wood rot, structural issues requiring termite inspection, or co-owned configurations are frequently non-starters under VA guidelines.

The other consistent challenge involves income qualification for transitioning military members. Standard underwriting wants two years of averaged income, a requirement that breaks down when someone is leaving active duty or starting a new civilian career. Medve describes a recent case: a shooter stationed on the USS Abraham Lincoln, deployed at sea with an active contract, whom multiple lenders had rejected. The qualification hinged on a rule Medve says others missed: as long as the borrower remains in military service for at least a year, active duty pay counts.

“We got him qualified within three hours,” Medve says. “His wife’s going to occupy within 30 days. The guidelines were met.”

What Comes Next

Medve sees a market where smaller lenders operating on higher margins, charging 2% to 2.75%, are vulnerable if volume doesn’t recover, while high-volume operators with lower margins can sustain through the cycle. He also notes early signs of short-term rental investors exiting, which could add inventory in vacation markets.

The broader macro picture, in his view, points toward lower rates: government efforts to shift long-term debt to short-term instruments, declining gas prices, and low inflation readings. But he doesn’t expect a flood of distressed inventory to accompany that shift.

“I don’t think we’re going to see a lot of foreclosures,” Medve says. The reason: current homeowners locked into rates of 2.25% to 3% from four years ago are unlikely to sell and give up those terms unless they must. That “poison pill,” as Medve calls it, keeps existing inventory off the market even as demand builds.

For VA-eligible buyers, the implication is that the window of negotiating power, soft prices, willing sellers, and available inventory narrows as rates fall. Buyers who act now at higher rates but lower prices position themselves to refinance once costs decline, capturing both the price advantage and the eventual rate improvement.

About the Expert: Marty Medve is Co-Owner and Principal Broker at Trident Home Loans, a Florida-based lender licensed in 49 states specializing in VA lending for military and aviation professionals. A former Navy carrier pilot, he spent 30 years as an airline captain.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.