Will We Ever See 4% Mortgage Rates Again? Heres the Honest Answer [V8oyNausOaW]
If you're holding out for 4% mortgage rates before you buy, you might be waiting a very long time. Here's why. This is probably the question I get asked the most, will mortgage rates ever get back down to 4%? And I want to give you the honest answer, not the one that keeps you waiting forever. It's highly unlikely, at least anytime soon. To see rates that low again, you'd basically need a severe recession, a spike in unemployment, and the Federal Reserve stepping in with massive emergency measures, like buying up mortgage-backed securities the way they did before. Right now, the 30-year fixed is sitting in the mid-to-low 6% range. Here's the mindset shift that helps a lot of buyers, those 3 to 4% rates we saw during the pandemic, and even after 2008? Those weren't normal. They were the result of aggressive, emergency monetary policy. Historically, a "normal" mortgage rate is actually closer to 6%. We weren't in the exception before, we're kind of back to it now. Looking ahead, most economists project rates to stay elevated, somewhere around 6.3 to 6.5% for the foreseeable future. There is a small silver lining. While 30-year rates look sticky, some analysts think shorter-term products, like 2-year or 5-year fixed or adjustable-rate mortgages, could see modest drops depending on how inflation and the bond market move. So if your plan is to wait for 4%, it's worth rethinking that strategy because the market you're waiting to return to may have actually been the anomaly, not the norm. Quick note — like any rate outlook, this is based on current conditions and can shift, so treat it as where things stand today rather than a fixed prediction. If breakdowns like this help you plan smarter, go ahead and subscribe. I put these out regularly for buyers here in the Bay Area. And if you're trying to figure out whether it makes sense to buy now or wait in Danville, San Ramon, or Dublin, reach out — happy to run through your specific numbers.