When Will Mortgage Rates Come Down?

If I had a dollar for every time someone asked me, “When are mortgage rates going to come down?” I’d probably have enough to buy another house.

The answer is simple:

No one knows!

Economists don’t know. Realtors don’t know. Mortgage lenders don’t know. And despite what you may hear on TV or social media, nobody can tell you exactly where mortgage rates will be six months or a year from now.

What I can tell you is that today’s mortgage rates aren’t nearly as unusual as they may feel.

Are Mortgage Rates Really “High”?

According to Freddie Mac’s Primary Mortgage Market Survey, the average 30-year fixed mortgage rate was 6.65% as of August 20, 2026.

If you’re comparing that with the 2%–3% mortgage rates we experienced during the COVID era, then yes—6.65% feels high.

But those COVID-era rates were historically abnormal.

The pandemic produced extraordinary economic conditions, and buyers became accustomed to mortgage rates that we simply shouldn’t consider normal.

For some perspective, Freddie Mac has tracked mortgage rates going all the way back to 1971. You can see the historical numbers yourself in the Freddie Mac Mortgage Rate Archive.

And here’s a statistic that always gets people’s attention:

In 1981, the 30-year mortgage rate reached a record high of 18.63%.

Yes—you read that correctly. 18.63%!

You can read more about that history through Freddie Mac’s mortgage rate and affordability guide.

People still bought homes. They adjusted to the market they were given.

That’s why I think it’s important to put today’s rates into perspective. A mortgage rate in the 6% range may seem extremely high compared with the COVID years, but the COVID years weren’t a normal interest-rate environment.

And personally, I wouldn’t build a home-buying strategy around expecting 2% or 3% mortgage rates to return anytime soon.

Why Doesn’t the Fed Just Lower Rates?

This is another question I hear all the time.

One of the Federal Reserve’s primary responsibilities is maintaining price stability while also promoting maximum employment. The Fed currently targets 2% inflation over the longer run.

You can read the Fed’s own explanation of how this works in The Fed Explained: Monetary Policy.

When inflation becomes too high, the Fed can maintain or raise its benchmark interest rate. Higher borrowing costs tend to slow spending and economic activity, which can help put downward pressure on inflation.

When inflation is under control and economic conditions warrant it, the Fed has more flexibility to lower rates.

Here’s something else that’s important to understand:

The Federal Reserve does NOT directly set mortgage rates.

Mortgage rates are influenced by inflation, Treasury yields, the bond market, economic expectations and many other factors. Fed policy certainly matters, but if the Fed cuts its benchmark rate, that doesn’t necessarily mean your mortgage rate drops by the same amount—or even immediately.

For anyone who wants to understand inflation directly from the source, the Federal Reserve’s inflation page is also a great resource.

The Danger of Waiting for the “Perfect” Rate

This is where I think buyers need to be very careful.

Let’s say you find a home you love today, but decide:

“I’m going to wait until mortgage rates hit 5%.”

Okay.

But what happens if that takes two years?

What happens if rates don’t get there?

What happens to home prices during that time?

And here’s the question I think buyers really need to consider:

What happens if rates fall and ten’s of thousands of other buyers who have been sitting on the sidelines decide to jump back into the market at exactly the same time?

That’s where waiting can become a slippery slope.

Today’s Las Vegas market can offer buyers opportunities that were extremely difficult to find during the COVID housing boom.

Depending on the home and seller, buyers may have opportunities to negotiate:

Purchase price
Seller-paid closing costs
Interest-rate buydowns
Repairs
Other concessions

Now imagine mortgage rates fall significantly.

Suddenly, buyers who have spent the last couple of years saying “I’m waiting for rates to come down” may decide it’s finally time to buy.

More buyers chasing the same desirable homes can mean more competition, fewer seller concessions and upward pressure on home prices.

You could potentially save money on your interest rate while paying more for the house itself.

There’s Another Option: Buy the House and Refinance Later

This is a strategy I think buyers should at least discuss with their lender.

Our in-house lending partner, Citywide Home Mortgage, offers our clients a great benefit when they finance their home through Citywide today.

If rates come down enough in the future to make refinancing worthwhile, Citywide offers eligible clients the opportunity to refinance without certain lender fees, subject to the program’s terms and qualifications.

That does not mean the refinance is completely free. Normal third-party closing costs and other applicable charges may still apply. We always recommend speaking directly with our Citywide loan officer so you understand exactly which costs would and would not be charged.

Citywide Mortgage also has refinance programs designed to reduce certain costs for qualifying homeowners. If you would like more information about this program, simply reach out to me (call, text, email or visit my website) My direct cell# is 702-218-4585

The basic strategy is pretty simple:

Buy the home when the home, price and payment make sense for you. If rates eventually fall enough to justify refinancing, explore refinancing later.

Because here’s something I tell buyers all the time:

You can refinance an interest rate.

You can’t go back in time and buy the house you passed on at yesterday’s price.

Stop Trying to Time the Market

After more than two decades selling Las Vegas real estate, I’ve watched buyers try to time interest rates, home prices and market cycles.