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The gap between expectations and market data is widening

Many U.S. consumers who plan to buy a home are choosing to wait if mortgage rates come down, but survey data show that this decision is often based less on current market conditions than on a mistaken view of rates. In a survey of 1,000 prospective buyers conducted for Neighbors Bank, only 35% of respondents were able to correctly estimate the average 30-year fixed rate within the right range, while 45% believed it was higher than it actually was.

According to the survey, 72% of buyers have put their home search on hold. The longest delay was recorded among millennials, at 14 months. Among those still waiting, 34% said they would buy the day rates fall to their target level.

The rate outlook does not point to a quick drop

According to Freddie Mac data, the average 30-year fixed mortgage rate stood at 2.65% in January 2021. It climbed to 7.79% in October 2023, then eased to 5.98% by late February this year before rising again to 6.49% on July 9 and to 6.66% as of August 27.

  • Fannie Mae forecast in its June outlook that the average 30-year fixed rate would be 6.4% through the rest of 2026 and edge down only slightly to 6.3% in 2027.
  • The Mortgage Bankers Association (MBA) expects rates to remain at 6.5% in the third and fourth quarters and to stay at that level throughout 2027.

Analysts speaking to U.S. News also said rates could remain in the 6% to 6.5% range over the next three years. LendingTree experts added that a return to 5% in 2026 is not expected and that dropping below 6% in the short term also looks difficult.

Waiting is already costing buyers in rent and home prices

Many who delayed now regret it

41% of those who postponed their search said they felt they should have acted before rates or home prices rose further. Another 17% said they would buy a home if they could relive 2025, while 40% trace their regret back to the pandemic period, when the 30-year fixed rate fell as low as 2.65%.

Higher rents are reducing savings power

Among all respondents, 49% said rising rents have left them able to save less for a home and have delayed their plans. In addition, 67% said the homes they are interested in have become more expensive since they began searching. A further 18% of those delaying said they are still saving cash for a down payment.

Ashley Harris said buyers should check current rates and the loan options on the table “instead of waiting for a number that doesn’t match the market.”

The report suggests that waiting for a rate cut alone may not deliver much of an advantage. Any modest pullback in rates could be offset by higher home prices and renewed competition, meaning buyers may not get the savings they expect.

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