72% of Homebuyers Have Paused Their Search Waiting for Lower Mortgage Rates — and 41% Already Regret It
Key Takeaways
- •Only 35% of 1,000 prospective buyers surveyed by Neighbors Bank could correctly place the average 30-year mortgage rate, while 45% overestimated it.
- •Fannie Mae forecasts the 30-year fixed rate averaging 6.4% through the rest of 2026 and 6.3% in 2027, while the MBA projects 6.5% through 2027.
- •The 30-year fixed mortgage rate was 6.66% as of August 27, after peaking at 7.79% in October 2023 and dipping to 5.98% in late February.
- •Of buyers who delayed purchasing, 41% regret waiting, and 40% trace their regret to not buying during the pandemic era when rates fell to 2.65%.
- •Rising rent has reduced savings for 49% of respondents, and 67% believe the homes they are shopping for now cost more than when they began their search.
Prospective homebuyers who are waiting for mortgage rates to fall before purchasing a house may well be watching a number that is out of date — and they are far from alone.
A poll commissioned by Neighbors Bank, a Columbia, Missouri lender that specializes in loans for first-time buyers and others the mortgage market tends to pass over, surveyed 1,000 potential buyers. Most of them could not say where rates actually stood while they waited: only 35% could place the average 30-year rate in the right range, and 45% overshot it.
The result is that many buyers are sitting out the market because of a number they are not tracking — a number that Fannie Mae, the Mortgage Bankers Association (MBA) and other forecasters do not expect to see again for years. In the meantime, 72% of the buyers surveyed have put their searches on hold, and millennials have logged the longest waits at 14 months.
Why forecasters say 5% isn't coming back soon
Freddie Mac's weekly survey had the 30-year fixed at 2.65% in January 2021, and by October 2023 it hit 7.79%. It initially slid to 5.98% toward late February of this year, then turned around to 6.49% as of July 9, and 6.66% as of Aug. 27.
Mortgage rates track the broader interest-rate environment, which the Federal Reserve influences through its own policy rate. The Fed raised rates aggressively in 2022 and 2023 to fight inflation, pushing borrowing costs across the economy — including home loans — to multi-decade highs, and rate-cut expectations have repeatedly been pushed back as inflation has stayed sticky.
The forecasts do not bend much from there. Fannie Mae's June housing forecast has the 30-year fixed averaging 6.4% through the rest of 2026, easing to 6.3% over 2027. The MBA's June Mortgage Finance Forecast, for its part, has it at 6.5% in the third and fourth quarters — and still at 6.5% through 2027. Analysts told U.S. News they see rates holding between 6% and 6.5% for the next three years, and the outlet reported that Fed officials' own June projections made a 2026 rate hike look likelier than a cut.
Still, 34% of the holdouts say they would pull the trigger the day rates hit their number.
Regret is setting in for the holdouts
Among buyers who have delayed, 41% already have regrets, saying they should have moved before rates or prices got worse. If they could rerun 2025, 17% say they would have bought a house instead. Meanwhile, 40% say their regret goes back further, to the pandemic era, when the 30-year rate fell as low as 2.65%.
Waiting has not been free, either. Among all respondents, 49% said rising rent has left them with less to save for a house and delayed their plans. And 67% think the homes they are shopping for cost more now than when they started.
What buyers can do in a 6.7% market
The report's advice begins with a reality check, since so many buyers had the current rate wrong.
"Before writing off this year, homebuyers should check where rates actually stand and what loan options are on the table, instead of holding out for a number that may be out of step with the market," writes Ashley Harris, the bank's director of homebuyer education, in the report.
Buying the rate down is another route. A buyer who pays for discount points at closing walks away with a permanently cheaper rate and a smaller monthly bill. Down payment assistance programs — some forgivable, some deferred — can shrink the upfront cash a buyer needs, the cost that 18% of holdouts said they are still saving toward. Neighbors Bank offers both options and specializes in first-time buyers, though, so it benefits when people stop waiting. Its rate history comes straight from Freddie Mac, and its read on the forecast matches Fannie Mae, the MBA and the analysts U.S. News surveyed.
Buyers who lock in a rate today also retain a standard exit valve: most lenders offer a refinance later, so if rates do eventually fall, an existing loan can be replaced with a cheaper one — though refinancing carries its own closing costs and is not guaranteed to pay off.
LendingTree's experts do not expect 5% in 2026, and they do not see rates dropping below 6% anytime soon either. Even if rates ease later this year, they warn, rising home prices and competition could offset whatever a buyer saved by waiting.
This article originally appeared on Moneywise.com. It provides information only and should not be construed as advice.
