ShareNPR
Many forecasts have rates near 6% at the end of this year — and falling to about 5.8% next year. "I think the new normal is maybe 6% mortgage rate," says Lawrence Yun, the chief economist at the National Association of Realtors®. "If we are lucky, maybe we get to a 5.5% mortgage rate. Or if we are unlucky, maybe the mortgage rate trends back up towards 7%." But Yun is confident of one thing: The days of 3% and 4% mortgage rates are over — at least in his lifetime, he says. For home buyers, the ever-shifting rate environment can foster uncertainty: Is it better to wait for mortgage rates to fall, or start looking now?
Experts advise against trying to time the market — including when it comes to buying a home. That's for two reasons. First, if you buy a home and then mortgage rates do fall, you can refinance your mortgage and take advantage of the lower rate. But if you wait and rates go up, it just gets harder to afford a home. Second, home prices do tend to rise over time. Yun says that even people who bought homes at much higher mortgage rates — like 15% in the early 1980s — have typically had those purchases turn out well, because of rising home values and the ability to refinance as rates fell.