Category Archives: Real Estate Investment

Is 7% the New Normal For Mortgage Rates? What Rhode Island Home Buyers Should Know

If you’ve been waiting for mortgage rates to come down before buying a home, there’s an important new message coming from one of the housing industry’s leading economists:

It may be time to stop assuming significantly lower mortgage rates are right around the corner.

Lawrence Yun, Chief Economist for the National Association of REALTORS®, recently addressed the rise in mortgage rates and concluded:

“Expect 7% as the new normal.”

That statement is getting attention — and understandably so.

But does it mean mortgage rates will stay at 7% forever? Does it mean Rhode Island home buyers should rush out and buy a house before rates go even higher?

No.

What it does mean is that buyers may need to rethink the strategy of putting their housing plans on hold while waiting for interest rates to return to the unusually low levels we experienced several years ago.

Mortgage Rates Are Back Around 7%

According to Freddie Mac, the average 30-year fixed mortgage rate was 6.95% as of September 17, 2026, compared with 6.76% the previous week and 6.26% one year earlier.

That puts mortgage rates essentially back at the 7% level.

Yun pointed to several economic forces contributing to higher borrowing costs, including inflation pressures, oil prices and concerns surrounding federal borrowing.

However, his comments came with an important qualification.

Rates could come down if inflation improves, oil prices retreat, the federal budget outlook improves or productivity gains help reduce inflationary pressure.

In other words, “7% is the new normal” does not mean mortgage rates can never decline.

It means nobody can confidently tell you when they will.

Stop Trying to Predict Mortgage Rates

This is where I think the conversation with home buyers needs to change.

For the last several years, I’ve heard some version of this over and over:

“I’m going to wait until mortgage rates come down.”

I understand the thinking. A lower interest rate can substantially reduce a monthly mortgage payment and increase purchasing power.

But waiting for a specific interest rate means making one of the biggest financial and lifestyle decisions of your life based on something none of us can reliably predict.

Instead, I believe buyers should start with a different question:

Does buying a home make sense for me at today’s price and today’s payment?

That is a question we can actually answer.

What Does a 7% Mortgage Mean for Your Payment?

Interest rates matter.

For example, Freddie Mac illustrates the approximate principal-and-interest payment on a $300,000, 30-year mortgage this way:

  • At 6.5%: approximately $1,896 per month
  • At 7.0%: approximately $1,996 per month
  • At 7.5%: approximately $2,098 per month
  • At 8.0%: approximately $2,201 per month

Those figures are principal and interest only. Property taxes, homeowners insurance, mortgage insurance when applicable, condominium fees and other housing expenses also need to be considered.

That’s why I would never tell a buyer that the interest rate “doesn’t matter.”

It absolutely does.

The question is whether the complete monthly housing expense fits comfortably within your financial situation.

Should You Buy a Home in Rhode Island With a 7% Mortgage Rate?

There isn’t one answer that applies to everyone.

For one buyer, purchasing today could make sense.

For another, waiting six months may be the better decision.

And someone else may need to spend the next year improving credit, reducing debt, increasing savings or adjusting the price range they are considering.

That is why I don’t believe the decision should simply be:

“Buy now.”

or

“Wait until rates come down.”

Instead, we should look at your individual circumstances.

How long do you expect to live in the home?

What would the total monthly payment be?

How does that compare with your current housing expense?

How much cash will you have left after closing?

Do you have reserves for unexpected expenses?

What other financial obligations do you have?

And perhaps most importantly:

Would you still feel comfortable with the decision if mortgage rates did not come down anytime soon?

If the answer is yes, then it may be worth exploring what you can buy today.

If the numbers don’t work, that’s valuable information too. We can build a plan rather than forcing a purchase that doesn’t make financial sense.

What If Mortgage Rates Come Down After You Buy?

This is another question I hear frequently.

Depending upon the circumstances, homeowners may have an opportunity to refinance their mortgage if interest rates decline enough in the future.

But I don’t recommend purchasing a home because you’re counting on refinancing later.

There are costs associated with refinancing, qualification requirements can change, property values can change and nobody knows where future mortgage rates will be.

I prefer looking at a possible future refinance as an opportunity — not as something your home purchase depends upon.

Buy the house based on whether the numbers work today.

If rates eventually fall and refinancing makes financial sense, that’s a conversation to have at that time.

Higher Rates May Change How You Shop for a Home

If mortgage rates remain near 7%, buyers may need to approach the Rhode Island housing market differently.

Instead of focusing only on the maximum purchase price a lender approves, focus on the monthly payment you are comfortable living with.

That might mean adjusting the price range.

It might mean looking at a different community.

It could mean comparing different loan programs, down-payment options or potential assistance programs with a qualified mortgage professional.

And it makes shopping mortgage options particularly important. Your credit profile, down payment, loan program and lender can all affect the rate and terms you are offered.

The goal isn’t simply to qualify for the largest mortgage possible.

The goal is to purchase a home you can comfortably afford and still enjoy living your life.

The “New Normal” May Actually Require an Old-Fashioned Approach

For many years, historically low mortgage rates allowed buyers to focus heavily on purchase price.

A higher-rate environment makes the fundamentals much more important.

Budget.

Monthly payment.

Emergency savings.

Credit.

Debt.

Length of ownership.

Condition of the property.

And whether the home actually meets your needs.

That may not generate the most exciting real estate headline, but it can lead to much better decisions.

Don’t Put Your Life on Hold Trying to Predict the Market

Nobody knows exactly where mortgage rates will be six months or a year from now.

They could be lower.

They could be higher.

They could remain around 7%.

What we can determine is whether buying a home makes sense for you under today’s conditions.

If you’ve been sitting on the sidelines waiting for mortgage rates to come down, perhaps the next step isn’t immediately buying a house.

Maybe it’s simply running the numbers again.

Find out what you qualify for.

Determine what monthly payment you’re genuinely comfortable with.

Look at what homes are available in that price range.

Then make an informed decision based on your life and your finances — rather than trying to predict where mortgage rates are going next.

Thinking About Buying a Home in Rhode Island?

If you’re trying to decide whether buying now, waiting or adjusting your price range makes the most sense, I’m happy to help you work through the real estate side of the equation and connect you with qualified mortgage professionals who can explain your financing options.

The answer isn’t the same for everyone — and it shouldn’t be.

Joe Luca, REALTOR®
Serving Rhode Island and nearby Massachusetts
Real estate guidance for buyers, sellers and homeowners in transition.

Should You Buy, Sell, Renovate, or Stay Put? A Rhode Island Homeowner’s Guide

How to make smarter homeownership decisions in today’s Rhode Island housing market.

One of the questions I get asked most often isn’t whether home prices are going up or down.

It’s this:

“Joe, what should I do?”

Should I buy?

Should I sell?

Should I renovate?

Should I stay where I am for a few more years?

The answer is usually not as simple as what you hear on the evening news.

Recently, I’ve spoken with homeowners who are thinking about downsizing, parents who want to help their adult children buy their first home, and families who have outgrown their current home but aren’t sure they want to give up a mortgage rate they may never see again.

Each situation is different.

But one thing I’ve learned after years in real estate is that the best decision isn’t always the one the market tells you to make. It’s the one that helps you accomplish your goals.

Don’t Let Headlines Make Your Decisions

The media loves to talk about interest rates, home prices, inventory shortages, and housing affordability.

Those things matter.

But they don’t tell your story.

I’ve seen people successfully buy homes when interest rates were high.

I’ve seen people regret waiting for the “perfect” market.

I’ve also seen homeowners spend years living in a house that no longer fit their needs because they were afraid to explore their options.

The question isn’t whether it’s a buyer’s market or a seller’s market.

The question is:

What makes the most sense for you and your family?

Maybe It’s Time to Buy

Despite higher interest rates, many buyers are finding opportunities that simply weren’t available a few years ago.

There’s less competition in some price ranges.

Buyers may have more negotiating power.

And if the right house comes along, waiting for rates to fall isn’t always the best strategy.

After all, nobody knows exactly where rates or home prices will be six months from now.

Maybe It’s Time to Sell

Many Rhode Island homeowners have accumulated substantial equity over the last several years.

For some, that equity represents an opportunity.

Maybe you’re thinking about downsizing.

Maybe you’re retiring.

Maybe your children have moved out and you’re maintaining more house than you need.

Selling isn’t always about maximizing price.

Sometimes it’s about improving quality of life.

Maybe It’s Time to Renovate

I recently spoke with a homeowner who loved her neighborhood, loved her neighbors, and loved her house.

What she didn’t love was the lack of space.

Instead of moving, she started exploring renovation options.

For some homeowners, improving their current home makes more sense than moving to a new one.

The key is understanding the costs, the potential return on investment, and whether the improvements will truly solve the problem you’re trying to address.

Maybe Staying Put Is the Right Move

Sometimes the smartest decision is to do nothing.

And that’s perfectly okay.

If your home meets your needs, your finances are stable, and you’re happy where you are, there may be no reason to rush into a major decision.

Homeownership is not a race.

You don’t get extra points for moving.

A Framework for Better Decisions

One of the reasons I created the Five Pillars of Smart Homeownership™ is because homeowners face important decisions throughout every stage of ownership.

Those pillars are:

🏡 Buy Smart™

🏡 Own Smart™

🏡 Protect Smart™

🏡 Improve Smart™

🏡 Sell Smart™

Almost every housing decision falls into one of those categories.

The goal isn’t simply to buy or sell real estate.

The goal is to make informed decisions that support your financial goals, your family, and your future.

Final Thoughts

The most successful homeowners I’ve met don’t make perfect decisions.

They make informed decisions.

Before you buy, sell, renovate, refinance, downsize, or stay put, take the time to understand your options.

Ask questions.

Gather information.

Talk with trusted professionals.

Most importantly, make the decision that’s right for your situation—not the one somebody on television says you should make.

Because at the end of the day, smart homeownership isn’t about timing the market.

It’s about making decisions that move you closer to the life you want to live.

— Joe Luca, REALTOR®

Founder, Rhode Island Homeowner Insider™

Helping Rhode Islanders Make Smarter Homeownership Decisions.

Ready to Make Your Next Rhode Island Home Decision?

Explore the Rhode Island Homeowner Guide for practical help with buying, owning, protecting, improving, and selling a home. If you would like help applying this guidance to your situation, contact Joe Luca.

Tenant Screening Matters More Than Ever: Protecting Your Property, Income, and Peace of Mind

By Joe Luca, REALTOR®

In today’s housing market, owning rental property can be one of the most effective ways to build long-term wealth, create additional income, and strengthen financial security. But one of the biggest mistakes a landlord can make is rushing through the tenant screening process because they are anxious to fill a vacancy quickly.

Whether you own a single-family rental home in Rhode Island, a multifamily property in Massachusetts, or you are thinking about becoming a first-time landlord, proper tenant screening is one of the most important risk-management tools available to property owners.

The reality is simple:
The wrong tenant can cost thousands of dollars in unpaid rent, legal fees, property damage, stress, and lost time.

At the same time, landlords must also remember that tenant screening must always comply with federal, state, and local Fair Housing laws. The goal is not to discriminate or make assumptions. The goal is to apply consistent, lawful, objective standards designed to protect both the landlord and the tenant.

Why Tenant Screening Is So Important

Many property owners focus almost entirely on monthly rent amounts. Experienced investors often focus more heavily on consistency, reliability, and risk reduction.

A tenant who pays on time, respects the property, communicates honestly, and intends to stay long term is often far more valuable than someone who simply offers the highest rent.

Good tenant screening can help reduce:

  • Late payments
  • Evictions
  • Property damage
  • Lease violations
  • Neighbor complaints
  • Turnover costs
  • Legal disputes
  • Vacancy losses

In many cases, one problematic tenancy can erase years of positive cash flow.

Tenant Screening Is About Patterns

A proper screening process is not about finding “perfect” tenants. Very few people have perfect credit, perfect income, or perfect life circumstances.

Instead, professional screening looks for patterns.

Questions landlords should evaluate include:

  • Does the applicant have a history of paying obligations on time?
  • Is their income stable and verifiable?
  • Have they demonstrated responsibility in previous housing situations?
  • Are there inconsistencies in the application?
  • Do references and documentation align with the information provided?

Often, the biggest warning signs are not dramatic issues. They are inconsistencies, incomplete information, evasiveness, or rushed pressure tactics.

The Cost of Skipping Background Checks

Some landlords skip screening because they:

  • Know the applicant personally
  • Feel uncomfortable asking questions
  • Want to avoid vacancy costs
  • Believe “it will probably work out”

Unfortunately, informal decisions can create major financial exposure.

A comprehensive tenant screening process may include:

  • Credit review
  • Income verification
  • Employment verification
  • Rental history
  • Reference checks
  • Eviction history
  • Criminal background checks where legally permitted
  • Identity verification

The small upfront investment in screening can potentially save thousands later.

Fair Housing Compliance Is Critical

Every landlord should understand that tenant screening must comply with Fair Housing laws.

Federal law prohibits discrimination based on protected classes, and Rhode Island and Massachusetts may provide additional protections beyond federal law.

This means landlords should:

  • Use consistent screening criteria
  • Apply the same standards to every applicant
  • Document decisions carefully
  • Avoid subjective or emotional decision-making
  • Focus on legitimate business-related factors

Consistency is one of the best protections for both landlords and tenants.

The Importance of Income Verification

One of the most common problems in rental housing today is income instability.

Many experienced landlords prefer tenants whose gross monthly income falls within a reasonable multiple of the monthly rent obligation. While standards vary, consistency matters more than arbitrary decisions.

Verification may include:

  • Pay stubs
  • W-2 forms
  • Tax returns
  • Bank statements
  • Employer verification letters
  • Self-employment documentation

In an era of AI-generated documents and online fraud, verification has become increasingly important.

Credit Scores Tell a Story — But Not the Entire Story

Credit history can provide valuable information, but it should rarely be the only factor considered.

A credit report may reveal:

  • Payment history
  • Collections
  • Charge-offs
  • Debt levels
  • Bankruptcy filings
  • Overall financial habits

However, experienced landlords also understand context matters.

A temporary hardship from a medical issue or divorce may be very different from a long-term pattern of financial irresponsibility.

The goal is not perfection. The goal is evaluating overall risk responsibly and legally.

Rental References Can Reveal Important Details

Previous landlords can often provide valuable insight into:

  • Payment consistency
  • Lease compliance
  • Property condition
  • Communication style
  • Neighbor interactions
  • Notice practices

However, landlords should also recognize that not every reference is equally reliable. Some landlords may avoid negative comments entirely for liability reasons, while others may simply want a difficult tenant to move elsewhere quickly.

This is why tenant screening works best when multiple factors are evaluated together.

The Eviction Process Is Expensive and Stressful

Many first-time landlords underestimate how costly and time-consuming evictions can become.

Potential costs may include:

  • Lost rent
  • Court costs
  • Attorney fees
  • Property repairs
  • Vacancy periods
  • Emotional stress
  • Lost productivity

Even in situations where the landlord ultimately prevails, the financial damage can already be significant.

Proper screening dramatically reduces the likelihood of these situations.

Technology Has Changed Tenant Screening

Modern screening tools can provide:

  • Online applications
  • Automated background checks
  • Digital identity verification
  • Credit and eviction reporting
  • Fraud detection systems

At the same time, landlords should avoid over-relying on automation alone.

Technology is helpful, but human judgment, consistency, documentation, and legal compliance still matter tremendously.

Small Landlords Need Screening the Most

Ironically, smaller landlords often skip screening more frequently than large institutional investors.

But smaller property owners typically have less financial margin for error.

A large corporation may survive several bad tenants.
A small landlord with one or two units may suffer major financial hardship from a single problematic lease.

That is why careful tenant screening is not merely a “best practice.”
It is a core financial protection strategy.

Final Thoughts

Tenant screening is not about being overly strict or unfair. It is about making responsible, informed, and legally compliant decisions that protect everyone involved in the rental relationship.

Good tenants deserve professional landlords.
Professional landlords should also protect their investment responsibly.

In today’s market, careful tenant screening may be one of the most important financial decisions a property owner makes.

Whether you are a first-time investor, an accidental landlord, or someone expanding a rental portfolio in Rhode Island or Massachusetts, taking the time to screen properly can help reduce stress, protect your property, and improve long-term financial outcomes.

Frequently Asked Questions About Tenant Screening

What is tenant screening?

Tenant screening is the process landlords use to evaluate rental applicants before approving a lease. This process may include reviewing credit, income, rental history, references, background information, and identity verification.

Why is tenant screening important?

Tenant screening is important because it helps reduce the risk of unpaid rent, property damage, evictions, and lease violations. A proper screening process can protect both the landlord’s financial investment and the overall rental experience.

Can landlords check a tenant’s credit report?

Yes, landlords can check a tenant’s credit report with the applicant’s written permission. Credit reports may help identify payment history, debt obligations, and financial patterns.

How much income should a tenant have to qualify?

Most landlords look for tenants whose income reasonably supports the monthly rent payment. Specific standards vary, but consistency and documentation are important.

Are landlords allowed to perform background checks?

Yes, landlords are generally allowed to perform background checks where permitted by law and with proper authorization. However, landlords must comply with Fair Housing laws and any applicable state or local regulations.

What are some red flags during tenant screening?

Common red flags include unverifiable income, inconsistent application information, prior evictions, repeated late payments, falsified documents, or incomplete applications. No single factor automatically disqualifies an applicant, but patterns matter.

Should landlords contact previous landlords?

Yes, contacting previous landlords can help verify rental history and identify patterns of behavior. Previous landlords may provide insight into payment habits, lease compliance, and property care.

Is tenant screening different in Rhode Island and Massachusetts?

Yes, tenant screening laws can vary between Rhode Island and Massachusetts. Landlords should always understand and comply with federal, state, and local housing regulations before making rental decisions.

Can a landlord deny an application?

Yes, landlords can deny an application if the decision is based on lawful, objective screening criteria applied consistently to all applicants. Decisions must comply with Fair Housing laws and applicable state regulations.

What is the biggest mistake landlords make during screening?

The biggest mistake many landlords make is rushing the screening process because they want to fill a vacancy quickly. Careful screening often helps prevent much larger financial and legal problems later.

Current Rhode Island Source and Review Note

Reviewed August 30, 2026. Landlords should review the updated Rhode Island Landlord-Tenant Handbook and confirm current screening, fair-housing, notice, documentation, and data-handling requirements with qualified professionals.

This article is general educational information, not legal advice. Screening practices must comply with applicable federal, state, and local law.

Ready to Make Your Next Rhode Island Home Decision?

Explore the Rhode Island Homeowner Guide for practical help with buying, owning, protecting, improving, and selling a home. If you would like help applying this guidance to your situation, contact Joe Luca.