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Mortgages

Mortgage Rates

Mortgage Rates Below 6%? Don't Hold Your Breath

By: Adam Hardy

Editor: Katherine Peach

Published: Oct 23, 2025 4:36 p.m. EDT 4 min read

Photo-illustration of a house sitting on stacks of money

Money; Getty Images

If you’re waiting for mortgage rates to noticeably fall, don’t hold your breath.

Fixed rates for a 30-year mortgage are expected to stay above 6% for at least the next two years, according to a Mortgage Bankers Association, or MBA, forecast unveiled at the group’s annual conference earlier this week.

According to Money’s daily mortgage rate survey, the 30-year fixed rate is 6.3% as of Thursday. And despite a long-awaited short-term interest rate cut from the Federal Reserve last month, the MBA isn’t expecting mortgage rates to budge much anytime soon.

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Mike Fratantoni, chief economist at MBA, highlighted some silver linings at the conference.

“While mortgage rates are not expected to decline further,” he said, “housing supply has increased in recent months, which will ease home-price growth.”

In September, the typical sales price of a home ticked down to $363,000, while mortgage payments (assuming a 20% down payment and not including taxes or insurance) also decreased slightly to $1,812, the lowest point this year, according to Zillow data.

Interest rates are the sticking point for many Americans. The MBA’s projections are the latest in a series of reports that indicate homebuyers and sellers should get comfortable with mortgage rates around 6%. A recent analysis by Redfin found that about 1 in 5 homeowners have a mortgage rate of 6% or higher, and the real estate company expects rates to stay above that level for at least the next 12 months.

A September forecast by Fannie Mae, the government-sponsored mortgage group, was slightly more optimistic, projecting that mortgage rates could fall to 5.9% by the end of 2026.

Laurie Goodman, founder of Urban Institute’s Housing Finance Policy Center, previously told Money that she expects the housing market to "remain muted" until rates are 5.8% or lower.

“Remember, there are a lot of borrowers out there with very low rates," she said. And many aren't ready to give them up just yet.

Why are mortgage rates still so high?

Following a sub-3% stretch during the pandemic, mortgage rates broke the 6% threshold in September 2022 and haven’t looked back.

Soaring inflation had a lot to do with that, but as price growth moderates around 3% and the Fed begins cutting interest rates again, many are wondering why mortgage rates remain above 6%.

The simple answer is: The Fed doesn’t directly control mortgage rates.

In fact, when the Fed made its first rate cut last month, mortgage rates actually ticked up briefly. That’s because mortgage rates closely track the 10-year Treasury yield, which is a benchmark for long-term interest rates.

According to wealth management firm JMG Financial Group, key reasons why long-term interest rates are expected to stay elevated include long-term inflation expectations and a growth in the federal deficit.

For homebuyers, that unfortunately means the days of 3% mortgages are long gone. Mortgage rate data going back to the 1970s suggests that was a once-in-a-lifetime blip, and that mortgage rates above 6% have historically been the norm.

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