When Will Mortgage Rates Finally Drop Below 6%? The Experts Weigh In
If you’ve been monitoring mortgage rates, things have been looking pretty rosy lately. After starting 2025 just above 7%, rates have trended downward and, days before the September Federal Reserve meeting, they landed at an average of 6.13%, the lowest in three years.
The pandemic-fueled days of 3% rates are long gone, but the National Association of Realtors (NAR) has pinpointed a 6% mortgage rate as a tipping point that could unlock the congested housing market.
In a July report, NAR indicated dipping below 6% would make a median-priced home affordable for approximately 5.5 million more households, including 1.6 million renters.
“If rates were to hit that magic number, it’s likely that about 10% — or 550,000—of those additional households would buy a home over the next 12 or 18 months,” the organization said in the release.
When could rates dip below 6%? Fannie Mae, the government-backed enterprise that buys mortgages from lenders and packages them into guaranteed securities, is anticipating a 14-month timeline.
According to Fannie Mae’s latest Economic and Housing Outlook, mortgage rates will end 2025 at 6.4% and reach 5.9% at the end of 2026. That’s a slight shift from its forecast in July, when it predicted rates would stay at 6% or above at least until 2027.
Danielle Hale, chief economist at Realtor.com, agrees with Fannie Mae’s latest prediction.
“Mortgage rates are probably still going to start with a 6 all the way through the end of 2026,” Hale told CNBC Select. “We’ve been here before — mortgage rates got all the way down to 6.1% in September 2024 before spending several months going in the opposite direction.”
Many consumers hoped that the Sept. 17 Fed rate cut would lead to a notable rate drop. Rates actually increased slightly, according to Freddie Mac’s weekly Mortgage Market Survey, from 6.26% on Sept. 18 to 6.30% on Sept. 25.
That’s because mortgage rates are more tied to the 10-year Treasury rate, which has stayed above 4% since October 2024.
“That’s made it hard for mortgage rates to get below that 6% threshold,” Hale said.
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While the current average rate of 6.30% may be higher than borrowers would like, it’s still significantly lower than the 7.04% we saw in mid-January.
On a $300,000, 30-year mortgage, that 0.74% decrease would save you nearly $150 a month on your mortgage payment.
Home sales are already picking up
The downward trend has already spurred the housing market, according to NAR’s Pending Home Sales Report, which indicates home sales increased by 4% between July and August, when rates dipped from 6.75% to 6.56%.
That might not seem like much, says Hale, “[but] every decline in mortgage rates makes a difference for someone who’s on the fence about buying,”
Fannie Mae predicts home sales to climb to 4.72 million by the end of this year and increase to 5.16 million in 2026.
What to know if you’re thinking about buying now
If you’re in the market for a home, Hale says waiting for a rate fall a year from now isn’t the smartest strategy. Buying activity, which has already increased, is poised to surge in the coming months. That could lead to increased competition and higher listing prices.
“It makes sense to beat the rush,” Hale said. “We’re also very close to the seasonal sweet spot when buyers have the most advantages because of that lower competition.”
There are ways to get a better mortgage rate now, although you’ll need to spend more in the short run.
“You can take a rate that’s in the mid- to high-6% range and get it below 6%” right now, Darren Tooley, a loan officer at Union Home Mortgage in Southfield, Michigan, told CNBC Select.
On a $300,000 loan, buying two points (a 0.5% discount) would add $6,000 to your upfront expenses. However, if it means lowering your rate from the current average of 6.30% to 5.80%, it’d save you nearly $35,000 in interest over the life of your mortgage.
Not all lenders offer mortgage buydowns but Rocket Mortgage offers two or more discount points on 30-year fixed, jumbo, VA and FHA loans.
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Choosing a shorter term is another way to snag a lower rate: Shortly before the Fed made its rate cut in September, Tooley said, he was able to give a client looking at a 20-year mortgage a rate of around 5.5%.
“You don’t have to go down to a 15-year mortgage to get below 6% right now,” Tooley added.
If you want even better numbers, Hale suggests looking for a house that isn’t yet completed. Builders need to move inventory quickly and often try to attract buyers with lower rates for the first year or two.
“Builders are working with lenders to come up with better deals,” she said. “I’ve already seen builders advertise rates that start with a 4.”
Mortgage FAQs
Will it be cheaper to buy a house in 2026?
While mortgage rates are expected to drop next year, an ongoing housing shortage suggests that average home prices are unlikely to decline. Whether you’d pay more or less for a specific property depends on a host of variables, not just the mortgage rate landscape.
What is a mortgage buydown?
A buydown is a way to temporarily or permanently lower your mortgage rate by offering a lump sum of money up front. A borrower may purchase points, which lower the rate by a certain percentage. In other cases, the lender or seller will pay for a temporary buydown to help close the deal.
How much can you buy down your mortgage rate?
If you are buying mortgage points, each one typically reduces your mortgage rate by 0.25%. Lenders may allow you to buy as many as four points, which would lower your interest rate by 1%.
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Meet our experts
At CNBC Select, we work with experts who possess specialized knowledge and authority, gained through relevant training and/or experience. For this story, we interviewed Realtor.com Chief Economist Danielle Hale, who leads a team of analysts in sifting through real estate data to gain a deeper understanding of what’s next for the housing market. Prior to joining Realtor.com, she served as managing director of housing research for the National Association of Realtors.
We also interviewed Darren Tooley, a loan officer at Union Home Mortgage in Southfield, Michigan. A graduate of Central Michigan University, Darren has previously worked at Wells Fargo, Caliber Home Loans and Cornerstone Financial Services.
Why trust CNBC Select?
At CNBC Select, our mission is to deliver high-quality service journalism and comprehensive consumer advice to our readers, enabling them to make informed financial decisions. Every mortgage story is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of mortgage products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content independently of our commercial team and any outside third parties. We pride ourselves on maintaining high journalistic standards and ethics.
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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