When we recorded this episode in late July, mortgage rates had just pushed above 6.8%, their highest level in more than a year. Two months later, the question hasn't changed. The rate has.
As of September 28, Mortgage News Daily's daily index is at 7.50%, while Freddie Mac's latest weekly survey has the average 30-year fixed at 7.03%. So let's answer the question sitting in every comment section and every kitchen-table conversation: When are mortgage rates finally going down?
The honest answer isn't the one most buyers are hoping for. Rates can absolutely fall from here, but planning your life around a specific lower rate showing up is becoming harder to justify. One reason caught our attention when we recorded the episode: one of the last prominent holdouts in the lower-for-longer bond camp finally changed his view.
One of the most committed bond bulls of the last four decades finally turned bearish after most of the market had already moved away from the lower-for-longer thesis.
Inflation expectations are a major reason long-term rates stay elevated, but mortgage rates also reflect long-term Treasury yields, market uncertainty and mortgage-specific risk.
Some of the same inflationary forces keeping rates elevated also make housing more expensive to replace. That doesn't guarantee home prices rise every year, but it helps explain why high rates don't automatically create falling prices.
On a $450,000 home, waiting two years for a 6% mortgage while prices rise 3% annually saves only about $56 a month while giving up roughly $27,000 of appreciation and about $9,000 of principal paydown.
Homeowners have a refinance option renters don't, but any future refinance should be a bonus, not the thing making today's payment affordable.
Buy based on the payment, not the headline rate, and treat seller credits like real economic value instead of automatically spending them on a buydown.
The right time to buy is determined by your life, finances and time horizon, not by waiting for the Fed or some perfect mortgage-rate number.
Josh has closed loans at 8%, 6% and 3%. Neither of us is rooting for a particular number. The goal is to stop letting a mortgage-rate forecast make a life decision for you.
For several years, the basic assumption was that today's higher rates were temporary. Maybe inflation came from pandemic disruptions. Maybe tariffs, war, or energy prices were the culprit. Whatever the trigger, the expectation was that inflation would eventually normalize and mortgage rates would settle meaningfully lower.
Maybe they wouldn't go back to 3%, but 4.5% or 5.5% seemed realistic to a lot of forecasters. That view has been getting harder to defend.
Matt Graham, founder of Mortgage News Daily and a previous guest on our show, pointed out during the summer that Treasury yields had been moving through a roughly nine-month upward channel even though there had been shorter periods when mortgage rates improved. Then Lacy Hunt changed his position.
Hunt and Hoisington Investment Management had spent decades on the bullish side of long-duration Treasury bonds. Most of the bond market had already moved away from the idea that the post-financial-crisis low-rate environment was coming back, but Hunt remained one of the most prominent holdouts.
In July, Bloomberg reported that Hoisington had turned decidedly bearish on long-term Treasuries. That got our attention precisely because Hunt had resisted that shift for so long.
It doesn't mean he has suddenly discovered the future, and it doesn't mean rates can only move higher from here. The interesting question is whether his capitulation confirms the new consensus or whether almost everyone finally climbing onto the same side of the boat is exactly when the trade starts moving the other way.
Nobody knows, and that uncertainty itself matters to long-term rates.
Mortgage rates are built off the long-term bond market, not directly off the Federal Reserve's overnight rate. Inflation expectations are a major part of that because investors lending money for years need to be compensated for the purchasing power they expect to lose. Uncertainty can push long-term yields higher as well, while mortgage rates include another layer for mortgage-specific risks such as volatility and prepayment.
The basic inflation piece isn't complicated. Imagine a dollar today buys something that costs four dollars many years from now. If you're lending someone that dollar for a long period, getting only the original dollar back wouldn't make you whole.
You need compensation for the lost purchasing power, then you need an actual return for lending the money in the first place. If nobody has much confidence about where inflation, fiscal policy or interest rates are headed, investors generally demand more compensation for committing money for a long period. That's part of the term premium.
A 30-year mortgage is a very long promise. When inflation is elevated and the future is unusually uncertain, that's a difficult combination for mortgage rates.
This is also why waiting for the Fed to rescue mortgage rates can be frustrating. The Fed controls a very short-term policy rate, while mortgages are long-term instruments priced through the bond and mortgage-backed securities markets.
Fed policy matters because it influences inflation expectations, growth expectations and the bond market's view of the future. But the Fed does not simply cut its rate by a quarter point and hand you a quarter-point reduction on your mortgage.
We've seen that play out repeatedly. Mortgage rates can move before the Fed does anything, after the Fed acts, or even in the opposite direction if investors interpret the Fed's decision differently than borrowers expected.
If you want the deeper explanation, we covered it in our breakdown of whether the Fed rate affects mortgage rates. The useful takeaway is simple: waiting for a particular Fed meeting isn't a homebuying strategy.
Here's where waiting gets complicated. Affordability is terrible, so the natural reaction is to think there must be a better entry point ahead.
Maybe there is. But high mortgage rates don't automatically mean home prices fall.
Some of the same inflationary forces keeping mortgage rates elevated also increase the cost of replacing housing. Labor gets more expensive. Contractors cost more. Lumber, concrete, appliances and transportation cost more. Building the next house gets more expensive.
That doesn't guarantee the existing house you're looking at rises every year. High mortgage rates also hurt demand, and individual local markets can absolutely decline. What it helps explain is why elevated mortgage rates and rising nominal home prices can coexist.
The National Association of Realtors reported a median existing-home price of $440,600 in June 2026, up 1.8% from a year earlier and marking the 36th consecutive month of year-over-year price increases.
Why aren't prices rising faster? Affordability is crushing demand. Why haven't national prices fallen sharply despite that weak demand? Supply remains constrained in many markets, and replacing housing is expensive.
Those are different questions with different answers. A home can also get cheaper in real terms while becoming more expensive in dollars. If home prices rise 1.8% while general inflation runs 3%, the house lost ground to inflation even though the actual purchase price still went up.
That's an important distinction when you're waiting for the number on the listing to fall.
Let's use a $450,000 home. Put 10% down and you have a $405,000 mortgage. At 6.77%, principal and interest is roughly $2,632 per month.
Now suppose you wait two years and get exactly what you've been hoping for: mortgage rates fall to 6%. But the home appreciates 3% per year, so that $450,000 house is now worth about $477,000.
Put 10% down again and your loan is roughly $430,000. At 6%, your principal-and-interest payment is around $2,576. You waited two years for the lower rate and saved about $56 per month.
That isn't nothing, but it probably isn't the affordability breakthrough you were waiting for either. There was also a cost to waiting.
At 3% appreciation, you missed roughly $27,000 of home-price appreciation. On the original $405,000 mortgage, you would also have paid down roughly $9,000 of principal during those first 24 months.
If appreciation were only 2% annually instead, the house would be closer to $468,000 after two years and the payment savings from a 6% rate would be larger. The point isn't that buying today always wins. It's that rate and price move together in the affordability equation, and getting the lower rate you wanted doesn't necessarily produce the dramatically cheaper entry point you imagined.
Let's make the appreciation assumption even more conservative. Suppose that $450,000 home rises only 1.5% per year. Three years later, it's worth roughly $470,500.
If mortgage rates haven't fallen, you waited three years and now you're financing a more expensive home at essentially the same rate. Again, that isn't a forecast.
Some markets are still appreciating, while some local markets may decline over the next year or two. Housing is intensely local, which is why national commentary can only get you so far.
The important point is that waiting doesn't automatically create a better entry point simply because today's affordability is bad.
A homeowner has an option. If the economy weakens and mortgage rates fall enough to make refinancing worthwhile, the homeowner can refinance. The renter cannot refinance the rent.
Historically, this was a normal part of homeownership. You bought the house with the rate available at the time, then several years later, if the market gave you an opportunity to improve it, you refinanced.
The era after the financial crisis distorted that expectation because rates fell for such a long period that some homeowners became serial refinancers. Every few years there seemed to be another opportunity to cut the payment. We don't know whether that environment comes back.
So when people say, "Marry the house, date the rate," we add an important warning: There's no guarantee the date ends. It could be a shotgun wedding.
You have to be genuinely comfortable with the full payment you're taking on today. A future refinance is a bonus. It is not the plan.
If the purchase only works because you're assuming today's 6.75% or 7% mortgage becomes 5.5% two years from now, the purchase doesn't work today.
The same principle applies to temporary buydowns. A 2-1 or 3-2-1 buydown can be useful because it reduces what comes out of your pocket during the first few years, but the mortgage is still based on the full note rate.
For most buyers, we'd rather see the purchase work comfortably at that full note-rate payment and treat the temporary buydown as a bonus. If the only way the house feels affordable is the first-year subsidized payment, you're making a bet that something changes before the subsidy disappears.
Maybe rates fall and you refinance. Maybe your income rises. Maybe both happen. But they shouldn't have to happen for the house to work.
We break down the mechanics in our guide to temporary versus permanent mortgage buydowns.
If you're interested in buying, the useful question isn't, "How do I predict mortgage rates?" It's, "What can I control?"
Suppose you started shopping when rates were 6.25% and now they're 6.75%. That's frustrating, but the number that determines whether the home works for your life is the payment, not whether you got the rate your neighbor got six months ago.
Can you comfortably make the payment? Do you still have money after closing? Does the home fit your life for long enough to make the transaction worthwhile?
Those questions matter more than winning some imaginary contest over the note rate.
Seller credits have real economic value. A $10,000 credit might pay $10,000 of your closing costs and leave $10,000 more in your bank account. It might fund a temporary or permanent rate buydown. Depending on the negotiation, a lower purchase price may also be available.
The important thing is not to automatically spend the credit buying down the mortgage rate because it feels like someone else's money. It isn't Monopoly money.
Lay the options next to each other. What does $10,000 toward closing costs do? What does it do toward a permanent buydown? What does a temporary buydown accomplish? Would a lower price be better?
Then choose the option that actually helps you most.
Jeb saw a perfect example of how buyers can mentally misclassify this money. A buyer received a $10,000 seller credit and felt like he had somehow "made" $10,000, so he bought a golf simulator.
Fun purchase, but economically he didn't discover $10,000 on the sidewalk. He gave up another potential use for $10,000 of value in the transaction.
Housing is seasonal, and negotiation power changes with inventory. Builders carrying completed homes don't want to sit on them indefinitely, and sellers in markets with rising inventory may also become more flexible as homes sit longer.
That can create opportunities for price reductions, closing-cost credits or financing incentives. The opportunity isn't because "the market is crashing." It's because individual sellers have individual motivations.
Before you start making offers, you should know what different purchase prices actually mean. Not just the interest rate.
You need to know the payment, cash to close, money left after closing, different loan programs, different down-payment options, and different ways to use a seller credit. Josh generally wants borrowers looking at two to four side-by-side scenarios so they have a framework before emotion gets involved.
Then if the search takes three months and rates move, or you buy for $425,000 instead of $450,000, we adjust the framework. You shouldn't be rebuilding the entire financial decision every time Zillow sends you a listing.
This is exactly what we work through on a Roadmap call.
There is a real advantage to fixing your housing cost earlier in your adult life. The principal-and-interest portion of a fixed-rate mortgage doesn't rise with inflation. Over time, your income may increase, market rents may increase, and your mortgage balance falls.
That can make a payment that feels significant today occupy a much smaller part of your financial life ten years from now. But earlier doesn't mean as early as humanly possible.
Jeb recently heard from a 22-year-old who felt like life was passing him by because he didn't own a house yet. Jeb's response was basically: you're 22. You're not behind.
At that age, the flexibility to build your career, save money, figure out where you want to live and let your life develop may be far more valuable than forcing yourself into a house because you're afraid you've missed something.
The right lesson isn't "buy as young as possible." It's buy when the foundation is there, and don't delay once the only thing holding you back is a rate forecast.
If you buy and mortgage rates later fall, ownership gives you the opportunity to refinance. If rates instead rise, you've already fixed the principal-and-interest payment on your mortgage. That's valuable optionality either way.
It doesn't protect you from buying the wrong house, overextending yourself, losing a job or needing to sell into a weak local market. That's why the rest of the decision still matters.
You need a long enough time horizon, a payment you're comfortable with, money left after closing, and a home that makes sense for your life. Those things matter far more than guessing whether mortgage rates six months from now will start with a 5, 6 or 7.
The point of this article isn't that mortgage rates will never fall. They will move around. There will be recessions, periods when inflation cools, and almost certainly refinance opportunities for some homeowners.
But nobody knows when those opportunities arrive or how low rates go when they do. Since we recorded this episode in July, the opposite of the hoped-for scenario happened. Mortgage rates moved substantially higher, with Mortgage News Daily's daily index reaching 7.50% on September 28.
That doesn't prove they'll keep going up. It proves the problem with waiting for a forecast to give you permission to act.
If buying doesn't fit your life today, wait. If the payment stretches you too far, you need more savings, or you're likely to move in two years, wait.
But if the home fits your life, the payment is comfortable and you have the financial foundation in place, don't automatically postpone the decision because you're waiting for a mortgage rate somebody promised would eventually show up.
A future refinance is an opportunity. It should never be a requirement.
Stop guessing what you can really afford
It starts with a Discovery Call, a straight conversation about your real numbers. Josh and his team show you the price range and loan options that fit, and map out every step to closing. They handle your loan directly, never a referral, so you tour with confidence and write offers sellers take seriously.
They can. Mortgage rates could fall if inflation cools, economic growth weakens or the bond market begins pricing a materially different outlook.
But nobody knows when that happens or how large the decline would be. Since this episode was recorded in July, mortgage rates have moved higher rather than delivering the relief many buyers expected.
That's why we don't think your homebuying plan should require a particular future mortgage rate. Buy only if today's payment works. If rates fall later, refinancing becomes an opportunity.
Maybe, but a lower rate doesn't operate in isolation. On a $450,000 home with 10% down, a 6.77% mortgage creates a principal-and-interest payment of roughly $2,632.
If you wait two years, get a 6% rate, but the home appreciates 3% annually, the property costs roughly $477,000 and the new payment is only about $56 lower. During those two years, you also missed roughly $27,000 of appreciation and about $9,000 of scheduled principal reduction.
That doesn't mean buying today always wins. It means you have to model rate, price and time together instead of assuming a lower future mortgage rate automatically means a cheaper purchase.
Not directly. The Fed controls a short-term policy rate, while mortgage rates are driven primarily by longer-term bond and mortgage-backed securities markets.
Fed decisions can influence those markets, but mortgage rates can move before a Fed decision, after it, or even in the opposite direction. Waiting for the Fed to cut doesn't guarantee your mortgage rate will fall.
The useful part of the phrase is that a fixed mortgage rate can potentially be replaced later if rates fall enough to make refinancing worthwhile. The dangerous interpretation is assuming that refinance will happen.
There is no guarantee. You should be comfortable with the full payment you're taking on today. If rates fall later, great. That's an opportunity, not the thing making the purchase work.
Not automatically. A seller credit has real economic value. It can potentially cover closing costs, fund a temporary or permanent buydown, or allow you to keep more of your own cash after closing.
Depending on the negotiation, a lower purchase price may also be another option. The right answer depends on the numbers, so compare the choices side by side before automatically using the credit to chase a lower headline rate.