But a new survey shows that many buyers may not even know what mortgage rates are today. A survey by Neighbors Bank, a lender based in Columbia, Missouri, asked 1,000 potential homebuyers about their home-buying plans and mortgage rate expectations. Many homebuyers are waiting for mortgage rates to fall before buying a house.
Only 35% of buyers correctly knew the current range for the average 30-year mortgage rate . About 45% gave a rate that was too high. Millennials have been waiting the longest, with the survey showing that they have delayed their home searches for an average of 14 months.
Because 72% of the people surveyed said they have put their home searches on hold while waiting for better mortgage rates, this matters. This suggests that many people waiting for mortgage rates to fall may be looking at an old or outdated rate.
Still, the survey shows how strongly some buyers are attached to their target rate. US News also reported that Federal Reserve officials’ June projections made a 2026 rate hike look more likely than a rate cut. So, based on these forecasts, buyers waiting specifically for 5% mortgage rates could be waiting for years, rather than months. 34% of people who have delayed buying said they would buy a home immediately if rates reached their preferred number.
Why waiting for 5% could backfire
Mortgage rates were much lower a few years ago. Rates then climbed sharply as the US economy dealt with high inflation and the Federal Reserve raised interest rates. But the decline did not continue. The Mortgage Bankers Association (MBA) has an even less optimistic forecast for buyers waiting for a major drop. Analysts surveyed by U.S. For some buyers, the long wait is starting to look like a mistake. The regret goes back even further for some buyers. Waiting for a lower mortgage rate can also create other financial problems for buyers. Higher rent means some potential buyers are taking longer to build their down payments and other savings. This creates a difficult situation for buyers. A lower mortgage rate in the future may not necessarily mean a cheaper home. If home prices continue to rise while buyers wait, some of the savings from a lower mortgage rate could be wiped out by the higher price of the house. One option is to buy down the mortgage rate by paying discount points when closing on the loan. Discount points are upfront fees paid to the lender in exchange for a lower mortgage interest rate. A lower rate can then mean a smaller monthly mortgage payment over the life of the loan. Another option is down payment assistance. Some assistance programs can be forgiven, while others allow buyers to delay repayment. These programs can reduce the amount of cash a buyer needs upfront. Neighbors Bank offers both rate-buydown options and down payment assistance programs, although it is also a lender that benefits when people decide to buy. Even if mortgage rates decline later this year, buyers may not necessarily come out ahead. Lower mortgage rates could bring more people back into the housing market, increasing competition between buyers. At the same time, stronger demand could push home prices higher. This means a buyer who waits for a lower mortgage rate could end up paying more for the house itself.
The big problem for buyers waiting for a 5% mortgage rate is that major housing forecasters do not expect rates to fall that low anytime soon. Freddie Mac’s weekly survey showed the average 30-year fixed mortgage rate was just 2.65% in January 2021. By October 2023, the average 30-year fixed mortgage rate had reached 7.79%, according to Freddie Mac. Rates later came down, reaching 5.98% in late February 2026. The average rate climbed to 6.49% on July 9, 2026, according to Freddie Mac. By August 27, 2026, the 30-year fixed mortgage rate was 6.66%. That means buyers hoping for a return to 5% rates are still looking at a big gap between today’s rates and their target. Fannie Mae’s June 2026 housing forecast expects the 30-year fixed mortgage rate to average about 6.4% for the rest of 2026. Fannie Mae expects the rate to fall only slightly, to around 6.3% in 2027. The MBA expects the 30-year mortgage rate to remain around 6.5% in the third and fourth quarters of 2026. The MBA also expects the rate to stay at around 6.5% through 2027. News expect mortgage rates to remain between about 6% and 6.5% for the next three years. Among people who delayed their home purchases, 41% said they already regret waiting, according to the Neighbors Bank survey. Looking back at 2025, 17% of those surveyed said they would have bought a home if they could make the decision again. 40% said they regret not buying during the pandemic period, when mortgage rates fell to historic lows. Freddie Mac recorded a 30-year fixed mortgage rate of just 2.65% in January 2021, giving buyers at the time access to much cheaper borrowing. 49% of all respondents said rising rents have left them with less money to save for a home, according to the survey. At the same time, 67% of respondents said the homes they are looking at cost more now than when they first started searching. Experts at LendingTree do not expect mortgage rates to reach 5% in 2026. LendingTree’s experts also do not expect rates to fall below 6% anytime soon. With major forecasts pointing to mortgage rates staying around 6% to 6.5% for years, waiting specifically for 5% could leave some buyers on the sidelines for a long time — while rent, home prices and competition continue to rise.
Because mortgage rates are higher than they want, harris said buyers should not automatically reject buying this year. Because 18% of people who are holding off buying said they are still saving for the upfront costs of buying a home, this could be important. The key question for homebuyers, therefore, may not be “When will mortgage rates hit 5%?
These buyers said they worry they should have purchased before mortgage rates or home prices increased further. Ashley Harris, Neighbors Bank’s director of homebuyer education, said buyers should check current rates and available loan options before deciding to sit out the market. The first step may be to look at the actual mortgage rate today instead of waiting for a rate that may not return soon. Instead, buyers may need to ask whether they can afford a home at today’s rate, what loan options are available, and whether waiting could mean paying a higher price later.
