In short: Mortgage rates may be edging down from their recent peak, but with home prices still climbing, waiting a year to buy will only trim a negligible $26 off a typical monthly mortgage payment.
Mortgage rates continue to ease from their recent peak, though they remain significantly higher than a year ago.
Persistent inflation continues to influence the outlook for mortgage rates. Shelter inflation has effectively plateaued in the near term, with new-lease rents growing at their fastest pace of 2025-2026. Meanwhile, the September Consumer Price Index report showed inflation running hotter than expected beyond energy prices.
With inflation proving reluctant to budge, Zillow expects mortgage rates to ease only gradually, remaining at 7% or higher for the rest of 2026 and 6.5% or higher in 2027.
Challenging housing affordability continues to weigh on the for-sale market. Newly pending home sales, a leading indicator of future closings, fell 8.5% year over year in September. At the same time, rental demand increased significantly, with rental engagement per listing growing 19.2% compared to last year, as elevated borrowing costs push would-be homebuyers to rent instead.
Put together, those forecasts suggest that waiting a year would shave just $26 off the typical monthly mortgage payment compared with buying today. In other words, delaying doesn't necessarily offer much financial benefit.
Still, for buyers who have decided they want to purchase a home but are questioning when to make their move, there is an important tradeoff. Borrowing costs are expected to ease, but only slightly. Home values, meanwhile, are expected to rise modestly nationwide, offsetting some of the savings from lower mortgage rates.
What's the Impact on the Housing Market?
The Federal Reserve held rates steady at its October meeting to allow more time to observe the impact of previous tightening. However, markets expect an 80%+ chance of a rate hike in December.
Mortgage Rates Are Off Their Peak but Still Elevated
Mortgage rates may be moving lower, but buyers shouldn't assume that waiting will automatically make homeownership significantly more affordable.
If you're looking to buy a home right now, there are other ways to make the numbers work.
Rather than waiting for mortgage rates to drop, consider negotiating with sellers for additional financial incentives:
- Mortgage rate buydowns: Ask sellers to contribute toward lowering your interest rate, which could reduce your monthly mortgage payment.
- Closing cost assistance: Negotiate seller contributions toward eligible closing costs and prepaid expenses to reduce your upfront expenses.
- Seller concessions: Look beyond the asking price and consider how negotiating the overall terms could make a home more affordable.
Sometimes, the opportunity isn't just finding the right home at the right price. It's negotiating the right terms to make the purchase work financially.
The bottom line: If buying a home is already on your radar, don't automatically put your plans on hold waiting for lower mortgage rates. The right home, combined with strategic negotiations and seller incentives, could make buying today worth considering.
Seller concessions and mortgage rate buydowns are subject to seller agreement, lender approval, loan program guidelines, and applicable contribution limits.
