Homebuyers waiting for 5% mortgage rates may have to wait years as forecasts point to rates staying near 6% to 6.5%, while home prices rise.

Updated on: Aug 30, 2026, 20:55:52 IST

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Many homebuyers are waiting for mortgage rates to fall before buying a house. But a new survey shows that many buyers may not even know what mortgage rates are today. A survey by Neighbors Bank, a lender based in Columbia, Missouri, asked 1,000 potential homebuyers about their home-buying plans and mortgage rate expectations.

Only 35% of buyers correctly knew the current range for the average 30-year mortgage rate. About 45% gave a rate that was too high. This suggests that many people waiting for mortgage rates to fall may be looking at an old or outdated rate.

This matters because 72% of the people surveyed said they have put their home searches on hold while waiting for better mortgage rates. Millennials have been waiting the longest, with the survey showing that they have delayed their home searches for an average of 14 months.

Why 5% mortgage rates may be years away

The big problem for buyers waiting for a 5% mortgage rate is that major housing forecasters do not expect rates to fall that low anytime soon. Mortgage rates were much lower a few years ago. Freddie Mac's weekly survey showed the average 30-year fixed mortgage rate was just 2.65% in January 2021.

Rates then climbed sharply as the US economy dealt with high inflation and the Federal Reserve raised interest rates. By October 2023, the average 30-year fixed mortgage rate had reached 7.79%, according to Freddie Mac. Rates later came down, reaching 5.98% in late February 2026. But the decline did not continue.

The average rate climbed to 6.49% on July 9, 2026, according to Freddie Mac. By August 27, 2026, the 30-year fixed mortgage rate was 6.66%. That means buyers hoping for a return to 5% rates are still looking at a big gap between today's rates and their target.

Forecasts do not show a quick return to 5%

Fannie Mae's June 2026 housing forecast expects the 30-year fixed mortgage rate to average about 6.4% for the rest of 2026. Fannie Mae expects the rate to fall only slightly, to around 6.3% in 2027. The Mortgage Bankers Association (MBA) has an even less optimistic forecast for buyers waiting for a major drop.

The MBA expects the 30-year mortgage rate to remain around 6.5% in the third and fourth quarters of 2026. The MBA also expects the rate to stay at around 6.5% through 2027. Analysts surveyed by U.S. News expect mortgage rates to remain between about 6% and 6.5% for the next three years.

US News also reported that Federal Reserve officials' June projections made a 2026 rate hike look more likely than a rate cut. So, based on these forecasts, buyers waiting specifically for 5% mortgage rates could be waiting for years, rather than months. Still, the survey shows how strongly some buyers are attached to their target rate. 34% of people who have delayed buying said they would buy a home immediately if rates reached their preferred number.

Waiting is already creating regret

For some buyers, the long wait is starting to look like a mistake. Among people who delayed their home purchases, 41% said they already regret waiting, according to the Neighbors Bank survey. These buyers said they worry they should have purchased before mortgage rates or home prices increased further.

Looking back at 2025, 17% of those surveyed said they would have bought a home if they could make the decision again. The regret goes back even further for some buyers. 40% said they regret not buying during the pandemic period, when mortgage rates fell to historic lows. Freddie Mac recorded a 30-year fixed mortgage rate of just 2.65% in January 2021, giving buyers at the time access to much cheaper borrowing.

The cost of waiting is not just mortgage rates

Waiting for a lower mortgage rate can also create other financial problems for buyers. 49% of all respondents said rising rents have left them with less money to save for a home, according to the survey. Higher rent means some potential buyers are taking longer to build their down payments and other savings.

At the same time, 67% of respondents said the homes they are looking at cost more now than when they first started searching. This creates a difficult situation for buyers. A lower mortgage rate in the future may not necessarily mean a cheaper home. If home prices continue to rise while buyers wait, some of the savings from a lower mortgage rate could be wiped out by the higher price of the house.

What can buyers do in a 6.7% mortgage market?

The first step may be to look at the actual mortgage rate today instead of waiting for a rate that may not return soon. Ashley Harris, Neighbors Bank's director of homebuyer education, said buyers should check current rates and available loan options before deciding to sit out the market. Harris said buyers should not automatically reject buying this year because mortgage rates are higher than they want.

One option is to buy down the mortgage rate by paying discount points when closing on the loan. Discount points are upfront fees paid to the lender in exchange for a lower mortgage interest rate. A lower rate can then mean a smaller monthly mortgage payment over the life of the loan. Another option is down payment assistance. Some assistance programs can be forgiven, while others allow buyers to delay repayment.

These programs can reduce the amount of cash a buyer needs upfront. This could be important because 18% of people who are holding off buying said they are still saving for the upfront costs of buying a home. Neighbors Bank offers both rate-buydown options and down payment assistance programs, although it is also a lender that benefits when people decide to buy.

Why waiting for 5% could backfire

Experts at LendingTree do not expect mortgage rates to reach 5% in 2026. LendingTree's experts also do not expect rates to fall below 6% anytime soon. Even if mortgage rates decline later this year, buyers may not necessarily come out ahead. Lower mortgage rates could bring more people back into the housing market, increasing competition between buyers.

At the same time, stronger demand could push home prices higher. This means a buyer who waits for a lower mortgage rate could end up paying more for the house itself. The key question for homebuyers, therefore, may not be "When will mortgage rates hit 5%?"

Instead, buyers may need to ask whether they can afford a home at today's rate, what loan options are available, and whether waiting could mean paying a higher price later. With major forecasts pointing to mortgage rates staying around 6% to 6.5% for years, waiting specifically for 5% could leave some buyers on the sidelines for a long time — while rent, home prices and competition continue to rise.

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