Americans hoping mortgage rates will soon return to the levels seen earlier this year may have to wait longer than expected, according to one of the country's leading housing economists.
Robert Dietz, chief economist at the National Association of Home Builders (NAHB), said mortgage rates around 7.5 percent could remain the norm until geopolitical and economic uncertainties resolve.
“Unfortunately, I think this 7.5 percent range [for mortgage rates] is the new normal until we get a resolution on these geopolitical factors,” Dietz said on NAHB's Housing Developments podcast last week.
He also said unexpected policy and geopolitical developments had disrupted the group's 2026 housing forecasts and that their effects could persist through 2027.
The new prediction comes after mortgage rates rose sharply this year. The average 30-year fixed mortgage stood at 7.40 percent as of October 8, according to Freddie Mac, versus 6.30 percent a year earlier.
Why It Matters
Higher mortgage rates can dramatically increase the cost of buying a house even when the property's price does not change.
The latest Freddie Mac data shows just how quickly the market has shifted. The average 30-year fixed rate hit a 2026 low of 5.98 percent on February 26, then climbed to 7.40 percent on October 8, a 1.42-point increase.
For prospective homebuyers, that means affordability depends not only on home prices and wages but also on when they borrow and what rate they can secure.
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What To Know
Dietz said several forces are keeping borrowing costs elevated.
“We also have high inflation right now and that’s all tied to the Iran war,” he said. “There’s just a lot of policy items that are keeping the market in this state of limbo and the result is higher interest rates.”
He also described the economy as “really unbalanced” and said the bond market reflected that.
Mortgage rates are closely associated with movements in longer-term Treasury yields. They are not set solely by the Federal Reserve's benchmark interest rate, so changes in Fed policy do not necessarily translate into moves in mortgage rates.
“Since late 2023, there have been numerous predictions that have attempted to give a timeframe to when mortgage rates would start to decline,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
“Unfortunately, most of these have translated to false hope for millions of buyers who are still waiting on rates to be closer to what they were during the pandemic than the 7.5 percent we see today.”
Dietz did not name a specific month when he expects mortgage rates to begin falling substantially. But depending on geopolitical factors, other analysts say rates could stay elevated.
“The sad reality potential home buyers are going to have to confront is it looks increasingly unlikely we'll see much decline from current rates any time soon,” Beene said. “Inflationary pressures from military conflicts in multiple countries paired with already elevated pricing will more than likely equate to mortgage rates going higher before they go lower.”
30-Year Mortgage Rates Chart
Freddie Mac's weekly Primary Mortgage Market Survey analyzed how dramatically 30-year mortgage rates have moved during 2026.
Source: Freddie Mac Primary Mortgage Market Survey.
Rates fell below 6 percent in late February before reversing, and the October 8 average was 1.10 percentage points above the 6.30 percent recorded a year earlier.
“Mortgage rates could come down from these peaks, but I wouldn't promise buyers meaningful relief in the next 12 months,” Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek. “We've got persistent inflation, energy prices and high long term Treasury yields working against us. Until those pressures ease, I wouldn't expect a dramatic drop.”
How to Get a Lower Mortgage Interest Rate
Homebuyers cannot control Treasury yields, inflation or geopolitical events, but they can still get a mortgage rate below the market average in several ways:
Shop Around Among Multiple Lenders
Freddie Mac recommends borrowers shop around and get multiple quotes because doing so can save thousands of dollars over the life of a mortgage.
“This is both a good time and a bad time to be a buyer,” Kellie McIvor, the VP of Acquisitions for Redwood Living, told Newsweek.
“On the plus side, buyers will have less competition for homes. In all but the most desirable markets, this will drive down pricing and increase aggressive seller concessions. The quantity of patient buyers waiting out the current rate pressure also opens an opportunity for active buyers to shop around their mortgage rate and closing cost fees. Mortgage brokers are seeing the cuts in their commission checks and are more willing to deal to keep a buyer.”
Check Your Eligibility for a VA Loan
For qualifying veterans, active-duty service members and certain other eligible borrowers, VA-backed mortgages can carry lower rates than conventional loans.
On Monday, Zillow data put the national average 30-year VA purchase rate at 6.90 percent, compared with 7.44 percent for a 30-year fixed purchase mortgage.
VA borrowers can also use qualifying temporary buydowns. A temporary buydown uses money placed into an escrow account to reduce mortgage payments initially, with common arrangements including 2-1 and 3-2-1 buydowns.
Consider Buying Down the Rate
Buyers can sometimes pay extra upfront for a more favorable mortgage rate, while temporary buydowns reduce payments for an initial period before they return to the note rate.
“For the housing market, even modest rate reductions could bring sidelined buyers back into the market and encourage more existing homeowners to sell. However, affordability remains the fundamental challenge. Lower rates alone won't solve the housing shortage or elevated home prices,” Marc Halpern, CEO of Foundation Mortgage, told Newsweek.
“My advice to buyers is simple: Don't try to perfectly time the market. Focus on what you can comfortably afford today, explore your financing options, and remember that refinancing may be an option if rates decline later.”
Mortgage Interest Rates Today
Mortgage rates vary by lender, borrower, and the methodology used to calculate a national average, so there is no single universal mortgage rate.
However, Zillow data shows the following national averages:
- 30-year fixed: 7.44 percent
- 20-year fixed: 7.22 percent
- 15-year fixed: 6.77 percent
- 5/1 adjustable-rate mortgage: 7.28 percent
- 30-year VA: 6.90 percent
- 15-year VA: 6.70 percent
- 5/1 VA: 6.36 percent
Meanwhile, Freddie Mac's latest weekly benchmark was 7.4 percent for a 30-year fixed mortgage and 6.73 percent for the 15-year mortgage as of October 8.
“Buyers can't afford the payments, while existing homeowners with 3 percent mortgages are still reluctant to sell and take on a 7 percent loan. Even when rates start falling, returning buyers could put upward pressure on home prices,” Ryan said.
What Happens Next
For prospective buyers waiting for mortgage rates to return to the roughly 6 percent range seen earlier in 2026, Dietz's outlook offers little indication that this type of decline is imminent.
For homebuyers, that leaves them with two options. They can either wait for broader market rates to decline or look for a lower rate now by comparison shopping and securing help through loan programs.
“If the military conflict in Iran comes to an end in the next 4-6 months, Americans could finally start to see some decline in interest rates, but those rates won't come close to the less-than-four-percent rates some buyers dream of having,” Beene said. “For the time being, those days are gone.”
Contact Newsweek editors on this story: Jenni Fink and Sam Wilson.