For the past few years, mortgage rates have been a major reason buyers have stayed on the sidelines. Many have been waiting for rates to come down before making a move. But as the housing market continues to change, rates are only one part of the conversation.
Buyers have more options today than they’ve had in recent years, and that shift is creating new opportunities for those who are ready to buy a home.
One of the biggest changes in the housing market is the number of homes available for sale. In 2025, active housing inventory increased significantly compared to recent years. For buyers, that means more homes to consider and less of the pressure that came with the highly competitive seller’s market.
When inventory was limited, buyers often had to move quickly and compete with multiple offers. With more homes available, buyers may have more room to negotiate and more time to decide if a home is truly right for them. Simply put, having more inventory gives buyers more choices.
It’s hard not to compare today’s mortgage rates to the extremely low rates we saw in 2020 and 2021. But those rates were a unique period in the housing market, not the historical norm.
Looking further back helps put today’s rates into perspective. While they are higher than they were a few years ago, they are more in line with historical averages.
That’s why focusing only on the interest rate can sometimes overshadow the bigger picture. A home and mortgage payment need to make sense for your budget, your plans, and where you are in life.
The way homeowners think about mortgage rates is changing, too. For the first time in five years, more homeowners have mortgage rates above 6% than below 3%.
That matters because fewer homeowners are holding onto those historically low rates from a few years ago. As time passes, buyers and homeowners are becoming more accustomed to the current rate environment and making decisions based on what works for them today. Waiting for 3% mortgage rates to return may no longer be the deciding factor it once was.
There are plenty of reasons people move that have nothing to do with mortgage rates.
A growing family may need another bedroom. A new job could mean relocating. Parents may need to be closer to family, while empty nesters may be ready for something smaller.
For several years, the “lock-in effect” kept some homeowners from moving because they didn’t want to give up a low mortgage rate. That effect is beginning to ease as more homeowners decide their current needs are more important than holding onto a rate.
Sometimes, the right time to move has more to do with life than the market.
It can be tempting to wait another six months or another year in hopes that mortgage rates will fall. The challenge is that there’s no guarantee waiting will make a home more affordable.
Most 2026 housing forecasts expect mortgage rates to remain near current levels, with modest movement rather than a dramatic drop. At the same time, home prices are still expected to appreciate.
Even a relatively small increase in home prices can add thousands of dollars to the cost of a home. So while a future rate could be lower, the home itself could also cost more.
That’s why affordability needs to be looked at as a whole. The mortgage rate matters, but so do the purchase price, available inventory, negotiating opportunities, monthly payment, and your individual financial situation.
There isn’t one answer that works for everyone.
For some buyers, waiting may make sense. For others, the additional inventory and negotiating opportunities available today may make this a good time to start looking.
Rather than trying to predict exactly what mortgage rates or home prices will do next, start with what you can control. Look at your budget, your goals, the homes available in your area, and the financing options available to you.
A mortgage professional can help you run different scenarios and see what buying a home would actually look like based on your situation.
You don’t have to be ready to buy tomorrow to start the conversation.
Whether you’re thinking about buying your first home, need more space, want to downsize, or are simply curious about what you can afford, we can help you look at the numbers.
The housing market has shifted, and buyers have options they haven’t had in years. Let’s see what those options could mean for you.
Sources:
Fannie Mae – The Lock-In Effect Is Not the Only Reason for Housing Supply Woes https://www.fanniemae.com/research-and-insights/perspectives/lock-effect-not-only-reason-housing-supply-woes
Fannie Mae – Homeowner Mobility and Impediments to Moving https://www.fanniemae.com/research-and-insights/publications/homeowner-mobility-and-impediments-moving-housing-insights
Realtor.com Housing Forecasts & Research https://www.realtor.com/research/ Kiplinger – Housing Market Lock-In Effect Is Easing https://www.kiplinger.com/real-estate/selling-a-home/housing-market-lock-in-effect-easing
MarketWatch – What Home Buyers and Sellers Can Expect in 2026 https://www.marketwatch.com/story/what-home-buyers-and-sellers-can-expect-in-2026-will-mortgage-rates-go-down-fce6e191 |
National Mortgage Professional.com https://nationalmortgageprofessional.com/news/shift-lock-era-share-mortgages-above-6-surpasses-those-below-3
