Is it the rate, or is it the price?
Ask an owner why borrowing feels hard right now and you'll usually hear one word: rates.
That's part of it. But it's the smaller part. The bigger change over the last twenty years is what things cost. Homes, buildings, trucks, equipment, whole businesses, groceries. A payment is the price times the rate. When the price has doubled, a normal rate still lands like a heavy one.
The rate isn't the outlier
Average 30-year fixed mortgage rate was 7.40% for the week of Oct 15, 2026. In 2004 it averaged 5.84%. So today's rate is higher than 2004. It's also right around the average since Freddie Mac started tracking in 1971, which works out to about 7.7%, and inside the range the early 2000s ran through. In 2000 the average was 8.05%.
The price side moved a lot more. The median existing home sold for about $195,000 in 2004. In September 2026, the median was $417,500. That's a little more than double.
Short-term rates are snapshots too. As of Oct 15, 2026, the 10-year Treasury yield was 5.10% and the 3-month Treasury was about 4.3%. The Fed's target range for fed funds is 3.75% to 4.00%. These numbers move every week. They're here to show where things sit today, not where they're headed.
Price times rate: a hypothetical example
Hypothetical example, round numbers, principal and interest only, 30-year fixed, 20% down. Not anyone's actual loan.
2004: a $200,000 home, a $160,000 loan at 6%. About $960 a month.
Today: a $400,000 home, a $320,000 loan at 7.5%. About $2,240 a month.
Today's price at the old 6% rate: a $320,000 loan. About $1,920 a month.
Look at that last line. Even with the 2004-style rate, the payment roughly doubles, because the price doubled. The higher rate adds about $320 on top. In this example, price does most of the work.
The same math runs through a business. A building, a piece of equipment, or a company you're thinking about buying is priced in today's dollars. A rate that would have felt fine on the old price can feel tight on the new one.
What it means for owners
Three questions worth asking before the next big decision:
Buying a building? Separate the two numbers. If the payment feels tight, is it the price you'd pay or the rate you'd pay? Those lead to different conversations with your lender.
Financing equipment? Write down what the last one cost and what this one costs. If the price gap is the bigger number, a slightly better rate won't close it.
Holding cash or paying down a line of credit? Compare what the line charges against what your cash earns after tax, and how much cushion the business needs. Your lender and tax preparer can fill in the specifics for your situation.
At Vala Secure we always debated how much debt to use. I wanted a line of credit as an insurance policy for the cash-strapped stretches, because you don't always see those coming. After about two years of history, we opened one. Some months we never put a dollar on it. Having it there is what mattered.
Where cash can sit, by when you need it
Higher short-term rates mean cash can earn something again. The simplest way to sort it is by time.
Money you need in under a year: keep it easy to reach. That's where places like high-yield savings accounts, money market funds, and short T-bills tend to live.
Money you need in one to three years: match it to the date. CDs and Treasuries that come due around when you'll need the money are the usual tools.
Money you won't touch for three years or more: that's less of a parking question and more of a planning one. It belongs in the bigger picture with everything else you own.
Yields on all of these change, and none of them fits every situation. The point is to know which bucket each dollar is in before you decide what to do with it. Credit for the time-horizon idea goes to Rob Berger.
Flight Deck tip
Look up what your business savings or reserve account pays today, then compare it with the 3-month Treasury at about 4.3% as of Oct 15. If the gap is wide, ask your bank why before you move anything.
One next step
If you want a second set of eyes on how the building, the debt, and the cash fit together in your financial world, Book a Fit Call.