Key Takeaways
- Mortgage rate forecasts for the end of this year and next year are only modestly lower than current rates.
- The Federal Reserve is likely to lower interest rates in September, but 2025 rate cuts are not guaranteed. And even with a rate cut, mortgage rates may not drop.
- If you find a home you like and the timing fits your finances, it’s likely smart to go ahead and buy, as you’re not assured any payoff from waiting.
- If you’re shopping for a newly constructed home, buying soon is even more strongly recommended, given potential inflation effects.
- Remember: If rates drop in the future, refinancing is always an option.
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Where Experts Predict Mortgage Rates Will Go in 2025 and 2026
Deciding when to buy a home is never easy. If you’re ready to buy a home, you may be wondering if you should you take the plunge now, wait until later this year, or even hold out until 2026 in hopes of better mortgage rates.
Part of the timing challenge is how unpredictable mortgage rates are. They’re driven by a complex mix of economic forces, from inflation and housing data to movements in the bond market. And while the Federal Reserve’s benchmark rate has a direct impact on savings accounts and credit card rates, its influence on mortgage rates is only indirect.
For now, most forecasts suggest rates will stay in the 6% range well into 2026—perhaps even remaining in mid-6% territory. We compiled predictions from six leading sources—government-backed Fannie Mae, the Mortgage Bankers Association, the National Association of Realtors, the National Association of Home Builders, Wells Fargo, and mortgage analytics firm Curinos. Their latest outlooks are summarized in the table below.
Why a Fed Rate Cut Won’t Necessarily Lower Mortgage Rates
Waiting for the Fed to act may not be the best homebuying strategy. While financial markets are pricing in the likelihood of a September rate cut—possibly followed by another later in 2025—there’s no guarantee the Fed will lower the federal funds rate this year. With economic uncertainty heightened by President Donald Trump’s evolving tariff policy, nothing is certain about the Fed’s 2025 moves.
Even more important is the limited link between Fed policy and mortgage rates. While the Fed funds rate can influence factors that shape mortgage rates, it doesn’t directly determine them. In fact, the two can move in opposite directions. Late last year, for example, the Fed lowered its benchmark rate by a full percentage point between September and December—yet mortgage rates climbed 1.25 percentage points by mid-January.
That’s why banking on Fed cuts to lower your mortgage rate is risky. While reductions could help ease rates, it’s far from a sure thing.
Smart Timing Advice for Current Home Buyers
Mortgage rates recently dipped to their lowest point since early April before edging back up. The current 30-year average sits at 6.78% as of Aug. 20—only slightly above last week’s 6.69% low, which marked the cheapest level in five months.
“My advice is to buy if you find the right house, as inventory has increased relative to last year and feels as though we have shifted to a buyer’s market. And on the rate side, we’re only expecting nominal improvement through the remainder of this year,” said Rich Martin, director of Real Estate Lending Solutions at Curinos.
If you’re shopping for a newly constructed home, Martin added that you may have even more reason to buy now rather than later. “Expect new construction prices to go higher due to the impact of tariffs and the relative cost of construction,” he said. “In addition, the Trump administration’s immigration rhetoric may contribute to a lack of skilled laborers, thus adding increased cost pressures on home building.”
Of course, locking in a mortgage rate this year doesn’t mean you’re tied to it forever. If rates fall in the future, you’ll have the option to refinance and lower your borrowing costs. “There’s a strong likelihood to refi later in 2026 or 2027, as I do expect longer-term rates to move lower,” said Martin. Buyers planning to potentially refinance should still factor in the costs of refinancing, including closing costs.
Today’s Mortgage Rate News
We cover new purchase and refinance mortgage rates every business day. Find our latest rate reports here:
How We Track the Best Mortgage Rates
The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant credit score in the range of 680–739. The resulting rates represent what borrowers should expect when receiving quotes from lenders based on their qualifications, which may vary from advertised teaser rates. © Zillow, Inc., 2025. Use is subject to the Zillow Terms of Use.
