When will mortgage rates go down? Or maybe they're poised to move higher.

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Mortgage rates have been above 6.5% for most of four months. There has been little momentum to move lower. What if we're asking the wrong question: not when will rates go down, but are they poised to move higher?

No. As of August 27, Freddie Mac reported that the average 30-year fixed-rate mortgage rate was 6.66%. This is one basis point higher than last week. At this time in August 2025, mortgage rates averaged 6.56%, 10 basis points lower.

The average 15-year fixed mortgage rate this week was 5.98%, up three basis points from last week, and 29 basis points higher than this time last year.

Here's the Freddie Mac data on mortgage rates for the past 52 weeks as of August 27, 2026:

30-year fixed-rate mortgage: 5.98% to 6.69%

15-year fixed-rate mortgage: 5.35% to 6.04%

Will mortgage rates trend down by the end of 2026?

Mortgage rates generally move in unison with the bond market. The 10-year Treasury yield has mostly risen over the past three months, and home loan rates are mirroring that momentum.

"I think the bond market is more concerned with inflation, and more concerned with the burgeoning federal deficit," Melissa Cohn, regional vice president of William Raveis Mortgage, said in a statement. "The national debt recently topped $40 trillion, and the federal deficit is around $1.8 trillion for fiscal year 2026."

Wealthfront vice president of investment research Alex Michalka believes mortgage rates could actually rise before they fall.

"The unemployment rate has been steady for the last 12 months, and forecasts have it remaining steady or falling very slightly through 2028," Michalka wrote in a recent blog post. "This has translated into higher-than-expected retail sales and US GDP — both of which are inflationary and more likely to lead to higher rates than lower ones. With solid employment, healthy growth, and persistent inflation, it's unlikely that we see rate cuts anytime soon (barring any new global crises)."

The Fed is unlikely to play a role this year

The Federal Reserve lowered the fed funds rate three times in 2025, but the central bank has been on hold so far in 2026, including its most recent meeting on July 29. So, what does this mean for mortgage rates through the end of the year?

That federal funds rate tends to directly influence rates on shorter-term lending. While mortgage rates aren't directly based on the fed funds rate, they typically mirror fed funds rate trends. So, if the fed funds rate goes up, mortgage rates will likely follow. The inverse is also true.

The Fed — the common nickname for the Federal Open Market Committee (FOMC ) — has a new chairman, Kevin Warsh, but the same game plan: keep rates unchanged for now. At this point, Wall Street traders are expecting a quarter-point interest rate hike, possibly in October but more likely in December.

While short-term lending rates closely follow the fed funds rate, mortgage rates more closely follow the 10-year Treasury yield . As of August 26, the 10-year Treasury yield closed at 4.66% — compared to 4.22% a year prior.

Now, you're probably wondering why today's mortgage rates aren't in the 4% range , right?

To determine current mortgage rates , lenders add a "spread" to the 10-year Treasury yield. The spread is simply the difference between the rates consumers pay and the 10-year Treasury rate. Without getting too much into the weeds, charging a spread helps mortgage lenders cover costs associated with making loans to the public and the risk of providing such loans.

Mortgage spreads widened over the past few years, exceeding two percentage points. As bond yields have risen over the past six months, the spread has narrowed slightly but remains near two percentage points.

For example, the average 30-year fixed mortgage rate is 6.66%, and the 10-year Treasury yield is 4.66% — a spread of 2.00 percentage points.

Should you wait to buy until mortgage rates go down even more?

In short, no. You shouldn't necessarily wait to buy a home until mortgage rates drop below 6% or lower. Mortgage rates are just one part of the affordability equation. You also have to consider home prices, a factor of housing supply and demand.

The current housing market is in a crunch. To put it simply, buyers outnumber homes for sale, especially homes in price ranges accessible to the first-time home buyer . When supply and demand are out of balance like this, home prices tend to remain high since sellers know they'll have multiple buyers interested.

According to data from the Federal Reserve Bank of St. Louis, the median sale price of single-family homes has mostly trended upward since Q1 of 2009. At that time, the median sale price was $208,400. The median price had risen to $410,700 by Q2 2026.

Even in the event of a recession , prospective buyers likely won't see much relief. If interest rates drop like they tend to do in recessions, that will increase the number of people looking to buy and lock in a lower interest rate. That drives up demand for the already limited supply of homes.

To truly save, buyers need both interest rates and home prices to drop . Mortgage rates are holding steady, and housing prices are stagnant or even lowering in certain parts of the country. Situations may be improving for buyers.

Strategies for buyers in today's mortgage market

If you crave the comforts of homeownership, the best strategy in today's market may be to buy what you can afford. Whether that means a smaller house or a condo instead of a single-family home, owning something puts you in a position to start building equity.

Yes, shopping for the best mortgage lenders with low rates and fees is crucial when getting a mortgage. But to help you find your ideal home that balances affordability and desirability, it pays to adopt a curious mindset and consider lesser-discussed financial tools.

There's no better time to learn more about your local real estate market than today. By adopting a sense of curiosity, you could discover that your city has more to offer housing-wise than you previously thought.

You may want to take weekend excursions to lesser-known neighborhoods and suburban developments beyond the city limits. You never know what you'll find that could expand your idea of what "home" looks like — including new developments, school districts, and types of homes .

If you're looking to spend less on a home in today's mortgage market, a house needing a bit of TLC could help you do just that. Loans like the FHA 203(k) mortgage can roll your purchase and renovation costs into one convenient loan. When you qualify and have an accepted offer, your lender immediately funds the home's purchase price and puts the cost of renovations into an escrow account. As you make repairs, funds get disbursed.

How would it feel to have a longer commute yet come home to a house you love? Master-planned communities tend to crop up outside major cities, offering various amenities like parks, shopping, and top-notch schools — all in exchange for a longer commute. These areas could look a lot more palatable if they offer commuting options like park-and-ride or commuter rail. Dare to consider parking the car and taking public transit if it could get you into the home of your dreams.

While shared walls, floors, and ceilings might not immediately scream "dream home," they could help you find an affordable home in a terrific area. Condominiums come in various shapes and sizes, from apartment-style flats to townhomes. Depending on the area, you might even score a small backyard. However, be sure to consider HOA fees when calculating your monthly payment.

While the monthly payment on a 15-year mortgage will be higher than the typical 30-year, these loans have plenty of upsides. Not only will you pay off your home on a speedier timeline, but you'll also likely score a lower interest rate and save a ton on interest over the life of your loan.

To make today's mortgage rates more palatable, look into rate buydown options. An interest rate buydown lets you pay cash up front in exchange for a reduced interest rate on your mortgage. Buydowns can be permanent or temporary, like for your loan's first one to three years. Even a few years of lower rate relief can make today's home prices more affordable.

How soon will mortgage interest rates go down?

Experts aren't looking for much lower mortgage rates in the coming year or so. Fannie Mae's August Housing Forecast puts the 30-year fixed rate at 6.8% by the end of 2026 and predicts average rates to remain near that through 2027.

Compared to historical mortgage rates , 7% isn't considered a high rate. While it might be high compared to pandemic-era rates that were sub-3%, it's on par with mortgage rates in the 1990s and considerably lower than the double-digit rates seen in the late 1970s and early 1980s.

Is it impossible to get a 3% interest rate on a mortgage?

It's not impossible to get a 3% interest rate, but doing so requires the perfect set of circumstances. You'd need to find a homeowner with an assumable mortgage — one that can be passed to a new owner at the same interest rate as the original loan. Assumable mortgages are generally government-backed loans from agencies like the VA, FHA, or USDA.

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