Fannie Mae recently released their monthly forecast for housing. May’s forecast predicts 30 year fixed conforming mortgage rates with rates entering the 5% range in the second quarter of 2026.
While hearing that the 30-year fixed rate might hit the 5% range next year is music to many ears, there are some things I would keep in mind. For starters, the rates are NOT guaranteed – it’s just a forecast… although I’d rather see a forecast with mortgage interest rates trending lower instead of rates pushing higher. 😉
What’s important to keep in mind is that there are A LOT of home buyers who have been waiting for lower rates. As rates trend lower and the markets heat up, home prices will very likely move higher.
If there is a home that you want to buy and you qualify at today’s mortgage rates, I would probably buy that home at today’s price with the plan on refinancing when/if mortgage rates move lower. With that said, you have to keep in mind that again, there are no guarantees that rates will move lower so you have to be prepared for keeping the current rate/payment.
The improvement to interest rate may be offset by increased price in the home. Plus, buying sooner means that you get the opportunity to start paying down your mortgage balance, which creates more equity and you’re buying the same home at a potentially lower price than if you wait AND best of all, it means that you get to start enjoying your new home.
If you’re thinking about buying your next home, I’m happy to review scenarios for you and to create a game plan. Reach out to me for a quick 15-minute call or schedule more time, if you prefer.
Mortgage interest rates have been VERY volatile with all the movement in the stock market. Typically, when the stock market is plummeting, we see mortgage rates improve. This is because mortgage rates are based on bonds and investors will seek the safety of bonds. In the markets we recently have been experiencing, the lower mortgage rates may be available for moments before moving higher.
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