Will Rates Drop Below 6%%

jenniferscocos
6 days ago
2 min read

According to projections predicted by economists at the Mortgage Bankers Association (MBA), mortgage rates are not expected to drop below 6% for the next several years.

What the MBA’s Latest Forecast Means for Buyers, Sellers, and Agents

According to the MBA’s economists, the widely anticipated drop of 30-year fixed mortgage rates back under 6 % isn’t likely anytime soon. Rates are expected to remain “stuck” in the 6 %+ range for the next several years."

What the Forecast Actually Says

The MBA projects that the 30-year fixed mortgage rate will average above 6 % for the foreseeable future. Realtor
While some other forecasters see modest decline, none are banking on a sharp plunge to the 5 %-range within the next 12-24 months. (For reference: another forecast shows a gradual move toward ~5.9 % by end of 2025—but that’s optimistic for many markets.) Forbes+1
For buyers and sellers this means: affordability pressures persist, lock-in effects remain (many owners keeping lower-rate mortgages rather than moving) and inventory availability will continue to be a structural challenge.

Why Rates Won’t Plummet (Yet)

Several key drivers explain why rates are staying elevated:

Inflation & Fed policy: Even if the Federal Reserve pauses or reduces its benchmark rates, mortgage rates don’t always follow immediately. They hang on bond yields, inflation expectations and risk premiums.
Bond market expectations: The yield on the 10-year Treasury (which mortgage rates loosely track) still reflects caution about inflation, growth and economic uncertainties.
Supply-demand in housing: Low inventory, strong demand in certain segments, and the “rate-lock” phenomenon (homeowners with 3-4 % mortgages unwilling to sell) keep selling and buying dynamics strapped.
Affordability floor: With rates elevated, there’s less room for downward movement because borrowers already feel the pinch. A sudden drop could actually stimulate demand too fast, throwing off inventory and pricing dynamics. (Yes, irony.)

What This Means for Sellers and Buyers

For Buyers:

“Yes, we’re likely going to see rates above 6 % for now — so don’t count on 4-5% deals anytime soon.”
Emphasize locking-in if they find a home they love and their budget works. Because waiting for rates to drop might cost them in appreciation or competition.
Show scenarios: compare current monthly payment at 6.25% vs what it might be if it drops to 5.75% two years later—but also factor in price increases and inflation. The net benefit may not be as big as they hope.

For Sellers:

Educate them: high-ish rates mean fewer buyer moves (because many owners are locked into low rates), so listing competition may stay constrained. That can support pricing.
But also caution: affordability pressure means you may need sharper pricing, staging, or incentives to attract qualified buyers.

For Investors / Move-up Buyers:

In a market where rates remain elevated, focus on value drivers beyond just rate. Location, rental potential, cash-flow, and long-term hold strategies become even more important.
Consider creative financing (seller-carry, assumable loans if available) and models that anticipate staying above 6 %.