Waiting for Rates to Drop Can Be Costly

Would-be homebuyers who are waiting for mortgage rates to drop before buying a home may be disappointed.

As of June 2026, rates for a 30-year, fixed-rate mortgage average around 6% to 6.5%, which is more than double what they were in 2020, when they dipped below 3% for several months.

But today’s rates are well below the historical average of 7.69%, and they’re about a third of what they were in October 1981, when rates peaked at 18.63%.

What factors affect mortgage rates?

The yield for 10-year Treasury bonds serves as a benchmark for mortgage rates. That yield is affected by inflation expectations, investor confidence and the general economic outlook.

Although inflation has fallen significantly since 2022, when it exceeded 9%, the inflation rate of 4.2% in May 2026 is more than double the Federal Reserve Board’s target of 2%. At its most recent meeting, nearly half of Fed policymakers signaled expectations of at least one rate hike before the year ends.

The Fed sets the federal funds rate, which doesn’t directly affect mortgage rates, but factors driving Fed decisions also affect 10-year Treasury yields. Mortgage rates often move in anticipation of Fed policy changes.

What are experts predicting for mortgage rates?

Experts at HUNT Mortgage expect mortgage rates to remain stable this year. If there is any decrease, it may be offset by an increase in housing prices.

How do rates affect housing prices?

When rates drop, demand for housing typically increases, driving prices higher. Low rates in recent years also led to a decrease in inventory, as homeowners were reluctant to sell, because they didn’t want to give up their low mortgage rate.

Low inventory drove up prices, as the supply of housing failed to keep up with demand. However, inventory has been increasing in some regions and in those areas the market is more balanced than it has been in many years. While buyers in some parts of the country may still be experiencing bidding wars, in other areas homebuyers are more likely to negotiate price concessions.

What can you do to reduce your mortgage rate?

Mortgage rates vary based on many factors, ranging from location to credit scores. If you can afford a large down payment, you may be able to reduce your mortgage rate.

If you find a home you’d like to buy and your mortgage rate is higher than you anticipated, you can always refinance if rates drop.

Whether or not you decide to buy now, you can prepare by using the HUNT Mortgage calculator to determine the mortgage payment you can afford. You can also schedule a pre-qualification consultation or apply for a HUNT Mortgage Pre-Purchase Commitment.

Taking these steps will prepare you so you don’t miss an opportunity when you find a home you would like to purchase.

The information above is accurate at the time of posting, but it is subject to change based on market conditions.