Name: Drop in mortgage rates could bring potential homebuyers back to market
Uploaded: 2026-01-16T16:32:37.655Z
Duration: 2 min 13 s
Description: Buying a home has felt out of reach for many Americans, but some experts believe 2026 could bring a little relief.

Buying a home has felt out of reach for many Americans, but some experts believe 2026 could bring a little relief.

San Diego

Mortgage rates in the United States have dropped from a recent high of 8% to 6.25%, with experts predicting they could fall below 6% within the year. President Trump has proposed that the government purchase $200 billion in mortgage bonds to further reduce rates and has suggested additional measures to address housing affordability, such as banning institutional investors from buying single-family homes and extending mortgage terms.

Despite the decline in rates, many first-time buyers remain hesitant due to economic uncertainty. Experts note that while lower rates may save borrowers hundreds of dollars monthly, the long-term solution to affordability lies in increasing housing construction and inventory. Prospective buyers are advised to be patient and ensure they can afford payments before purchasing.

Drop in mortgage rates could bring potential homebuyers back to market

Housing costs are at the forefront this month as President Trump wants the government to buy $200 billion in mortgage bonds, a move aimed at lowering mortgage rates. We're breaking down what this could mean for buyers and why experts say rates could have some room to drop in 2026. For many first-time buyers, the dream of homeownership is still just a goal. I think part of the American dream and part of what we strive for is to say that we have something to call our own. Matt Narocki feels buyers are still hesitant. Even with the interest rates having dropped a little bit, there's some uncertainty in the economy right now. So folks aren't as eager or as willing to rush out to buy their first home. Bank Ritz Ted Rossman says there may be more room for relief in 2026. Right now the average 30-year fixed rate is 6.25%. A year ago it was around 7%. A couple years ago it was around 8%. We briefly hit 8% a little over two years ago. That was the first time in decades. So we're moving in the right direction. And a drop could change the math for some households. I do believe that the average 30-year fixed will fall below 6% this year, probably sooner rather than later. That could easily save the typical borrower $200 or $300 a month compared to when rates were in the sevens. Rossman also says home prices may be leveling off in some markets. If you're looking to enter the market, at least we're no longer seeing super high mortgage rates and we're no longer seeing astronomical jumps in home values. President Trump has floated new ideas to address affordability, banning institutional investors from buying single-family homes and having the federal government buy mortgage bonds to push rates down. In the past, he suggested extending the 30-year mortgage rate to 50 years to lower monthly payments. Rossman says it's unclear how much this could move the needle. The solution seems to be that we need more building and we need more inventory. For prospective buyers like Narocki, even lower rates wouldn't make the decision simple. His advice for other buyers on the market? Be patient. Don't feel that you have to jump on the very first thing you see. You need to make sure you're looking at it from the perspective of, can I truly afford the payments and does it truly make sense? For Scripps News Group, I'm Jane Caffrey.

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