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. 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. 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.
Dietz said several forces are keeping borrowing costs elevated. 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.
But depending on geopolitical factors, other analysts say rates could stay elevated. 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.
Until those pressures ease, I wouldn't expect a dramatic drop.” Homebuyers cannot control Treasury yields, inflation or geopolitical events, but they can still get a mortgage rate below the market average in several ways: Freddie Mac recommends borrowers shop around and get multiple quotes because doing so can save thousands of dollars over the life of a mortgage. 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.
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