Mortgage rates have been anything but cheap lately. For the past two years, the average 30-year mortgage rate has hovered between 6% and 7%, even peaking at a staggering 7.79% — the highest in decades, according to Freddie Mac.
That’s a big jump from the rock-bottom rates we saw during the height of the COVID-19 pandemic, when rates fell to an all-time low of 2.65%. Those ultra-low rates were largely the result of emergency actions by the Federal Reserve to boost the economy. While we may never see those levels again, today’s high rates aren’t here to stay forever either.
So, when will mortgage rates dip below 6% again? And is it worth waiting for that before buying a home? Here’s what you need to know.
What Do High Mortgage Rates Mean for Homebuyers?
To really understand how today’s mortgage rates affect buyers, you have to look at home prices too. The median U.S. home price is currently $416,900, according to the U.S. Census Bureau.
Let’s say you take out a mortgage for that amount at a 6.75% interest rate — roughly the average as of mid-July. Your monthly payment (just for principal and interest) would be about $2,696. That’s over $32,000 per year — more than half of the average American’s annual income.
Here’s how much your monthly mortgage payment could change depending on the interest rate:
| Interest Rate | Monthly Payment |
|---|---|
| 7.00% | $2,696 |
| 6.00% | $2,422 |
That’s a difference of $274 per month or $3,288 per year. Over 30 years, that really adds up.
Will Mortgage Rates Fall in 2025 or 2026?
There’s some hope that rates will ease — but not dramatically.
- Fannie Mae expects mortgage rates to dip slightly to 6.6% by Q3 2025 and 6.5% by the end of the year.
- The Mortgage Bankers Association (MBA) projects rates around 6.7% by the end of 2025.
Neither group predicts rates will fall below 6% in 2026 either. Fannie Mae estimates 6.1% by the end of 2026, while MBA expects about 6.4%.
So, while it’s possible we’ll see sub-6% rates by 2027, that depends on several economic factors — especially inflation and Federal Reserve policy.
“Mortgage rates will likely stay in the 6.5% to 7% range for the rest of 2025,” said Jeff Taylor, managing director at Mphasis Digital Risk.
When Could Rates Finally Fall Below 6%?
Experts say that rates won’t drop below 6% until inflation comes down and stays down.
“For conventional mortgage rates to dip below 6%, we’d need to see inflation cool significantly and stay contained,” said Jennifer Beeston, EVP at Rate.
Other potential factors include:
- A rise in unemployment, which might encourage the Fed to cut rates.
- Greater investor demand for safe U.S. assets like Treasury bonds.
- The long-term effect of Trump-era tariffs on inflation and global trade.
- A potential change in Federal Reserve leadership in mid-2026.
Bottom line: if all goes well, we might see 6% rates by late 2026 or 2027.
Can You Get a Lower Mortgage Rate Right Now?
Waiting for rates to fall might not be your only option. Here are ways to secure a lower rate even in today’s market:
Boost Your Credit Score
The higher your credit score, the lower the rate lenders are likely to offer you.
Make a Bigger Down Payment
Putting down more money reduces the lender’s risk, and they may reward you with a lower rate.
Consider Buying Points
You can pay extra upfront to “buy down” your interest rate for the life of the loan.
Explore Rate Buydowns
These temporarily lower your interest rate for the first few years of the mortgage.
Shop Around
Freddie Mac says getting quotes from at least four lenders can save you over $1,200 per year.
Look at Adjustable-Rate or Shorter-Term Loans
These options often come with lower initial rates than the standard 30-year fixed loan.
And remember — if rates drop later, you can always refinance.
Should You Wait to Buy a Home?
If you’re ready to buy a home and find a place you love, it might not make sense to wait for a rate that may not come soon.
Lock in today’s price, start building equity, and refinance later when rates fall.
FAQs: Mortgage Rates & the Future
How low will rates go in 2025?
Fannie Mae forecasts 6.5%, and the MBA predicts 6.7% by the end of 2025.
When will rates drop below 6%?
Probably not until late 2026 or even 2027 — depending on inflation, employment, and the Fed’s decisions.
Will we ever see 3% mortgage rates again?
Unlikely. Those were emergency-level rates tied to pandemic shutdowns. Barring a major economic shock, we’re unlikely to return to that level.
Final Thought: While a return to 6% mortgage rates is possible, it won’t happen overnight. If you’re financially prepared and find the right home, don’t let today’s rates hold you back. The key is smart planning — not perfect timing.
