Will Mortgage Rates Go Down in 2027?

7 min read · LenderMatch Learn

Probably not by much. As of October 30, 2026, forecasters expect the 30-year fixed rate to stay roughly flat and above 7% through 2027: Fannie Mae’s October forecast averages 7.5% for 2027, and the Mortgage Bankers Association expects rates to “remain above 7% through 2027.” Freddie Mac’s weekly average was 7.24% for the week of October 29, 2026, the lowest reading in October but well above the 6.17% of a year earlier.

Below: why rates rose in 2026, what would have to change for them to fall, what waiting is worth on a $350,000 loan, and how refinancing later works out. If you would rather see what lenders offer you today, LenderMatch lets you compare several quotes at once.

Updated October 30, 2026, after the Fed’s October 28 decision and Freddie Mac’s October 29 survey. We update this page after every Fed meeting and each monthly Fannie Mae and MBA forecast.

Will mortgage rates go down in 2027?

Here is where the main forecasts stand, next to today’s average.

So the forecasts point to rates near where they are now, not a return to 6%. The chief economist of the National Association of Realtors, Lawrence Yun, put it this way on October 15, 2026: “I don’t see a major drop coming.” The full table, with the Fed’s projections, is in our mortgage rate forecast for 2027.

Why mortgage rates went up in 2026

Early in the year, rates were falling. Freddie Mac’s 30-year average hit 5.98% on February 26, 2026. By October 8 it was 7.40%. Three things changed along the way:

• Long-term bond yields rose. The 10-year Treasury yield went from 4.02% on February 26 to 4.98% on October 29, 2026 (Federal Reserve data). Atlanta Fed researchers found that over the past 20 years mortgage rates have tracked that yield more closely than the Fed’s rate.
• Inflation stayed high. Consumer prices rose 3.7% in the 12 months ending September 2026 (Bureau of Labor Statistics). The Fed’s goal is 2%.
• The Fed raised rates. On September 16, 2026, it raised its target range by a quarter point to 3.75% to 4.00%, its first increase in more than three years. It held there on October 28 in a 10-2 vote, and both dissenters wanted another increase.

What would need to happen for mortgage rates to go down

For the 30-year rate to fall meaningfully, some combination of these would have to happen:

• The 10-year Treasury yield would have to fall. The MBA expects it to stay near 5% through 2027, which is why its rate forecast stays above 7%. A Boston Fed paper (May 2026) puts the usual gap between mortgage rates and the 10-year yield at roughly 2 percentage points; on October 29 it was 2.26 points (our arithmetic). At a 2-point gap, a 6.5% mortgage rate would need a yield near 4.5%.
• Inflation would have to cool. Fed policymakers’ September projections see inflation (PCE) at 2.3% in 2027. Faster progress than that could pull yields down.
• The Fed would have to stop raising. The median Fed projection holds the federal funds rate at about 4.1% at the end of both 2026 and 2027, with the first decline in 2028 (3.9%). The MBA’s chief economist expects two more increases, in December 2026 and early 2027.
• The gap over Treasuries could narrow. The Boston Fed paper found that rate expectations, rate volatility and refinancing costs explain about 80% of the gap’s variation since 2006. Lower rate volatility would tend to narrow it.

None of these is in the current forecasts for 2027, but forecasts change. Fannie Mae moved its 2027 number from 6.7% to 7.5% in one month, and it can move the other way just as fast.

Should I wait for mortgage rates to drop?

It helps to put a price on the difference. Here is a $350,000, 30-year fixed loan at today’s average, at a lower rate you might hope for, and at the Fannie Mae forecast.

Calculated by LenderMatch. Principal and interest only; excludes taxes and insurance. The 6.75% row is an illustration, not a forecast.

A drop from 7.24% to 6.75% saves $115 a month, about $1,382 a year. That is real money, but it only pays off if the drop actually arrives. If rates follow the Fannie Mae forecast instead, the same loan costs $62 a month more than today.

What you give up while you wait depends on your situation: rent you keep paying, a home price that may change, or a high-rate debt you meant to pay off. Those are numbers only you can fill in. Waiting is a bet on a lower rate, and today’s forecasts don’t support that bet for 2027.

Buy now and refinance later: the break-even math

“Marry the house, date the rate” assumes you can refinance cheaply later. Refinancing has costs, and Freddie Mac says to expect 3% to 6% of the loan principal. Its test is simple: divide the total cost of the refinance by your monthly savings to get the months it takes to break even.

Say you take the $350,000 loan at 7.24% today. Two years later you owe about $342,958 and rates have fallen. You refinance, keeping the 28 years you have left so you don’t add time to the loan.

Calculated by LenderMatch. New loan amortized over the remaining 336 months. At 6% costs ($20,577), break-even doubles to 186 and 92 months.

A half-point drop takes almost eight years to earn back its costs. A full point takes about four. So refinancing later works best if rates fall by a point or more, or if you can get the costs down. Freddie Mac’s own example: if you might move in two years but need three to recoup the cost, the refinance probably does not make sense. More on this in when refinancing makes sense, and you can test your own numbers in the refinance break-even calculator.

Frequently asked questions

Will mortgage rates go down in 2027?

Current forecasts say not by much. As of October 30, 2026, Fannie Mae’s October forecast puts the 2027 average for a 30-year fixed at 7.5%, and the Mortgage Bankers Association expects rates to stay above 7% through 2027. Freddie Mac’s average was 7.24% the week of October 29, 2026.

Will mortgage rates go down in the next 30 days?

Nobody can reliably say. Weekly averages do move: Freddie Mac’s 30-year fell from 7.40% (October 15, 2026) to 7.32% and then 7.24% over the next two weeks. The Fed’s next meeting is December 8 and 9, 2026, and it will publish new projections then.

Will mortgage rates ever be 3% or 4% again?

No forecast we found shows anything close through 2027. The lowest weekly average of 2026 so far was 5.98% (February 26). Fed policymakers’ median longer-run projection for the federal funds rate is 3.2%, but mortgage rates have run about 2 points above the 10-year Treasury yield, which was 4.98% on October 29, 2026.

Do mortgage rates go down when the Fed cuts rates?

Not automatically. The Fed sets a short-term rate. Thirty-year mortgage rates follow the 10-year Treasury yield more closely, and they can rise after a cut or fall after an increase. See our Fed meeting schedule for how each kind of rate reacts.

Should I wait to refinance until rates drop?

Run the break-even math on a real quote. Divide your closing costs by your monthly savings to get the months it takes to earn them back. If that is well inside the time you plan to keep the loan, the refinance can make sense now; if not, waiting costs you little, and you can rerun it when rates move.

Does LenderMatch check my credit?

No. LenderMatch never pulls your credit. A lender you choose may check it, with your permission, when you apply.

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