Getty Images/iStockphoto
If you’ve been waiting this past year for mortgage rates to drop before buying a home, it’s understandable if your patience is wearing thin. Whenever rates have cooled, they haven’t stayed down for long. According to FreddieMac data, the average 30-year fixed rate dipped below 6% in late February, then climbed right back to almost 6.5% by early April. The rate then fell slightly before returning to its current level of 6.50%, as of June 8, 2026.
Sure, you could keep waiting for mortgage rates to decline, but that raises another concern. What if you wait too long for a rate drop that never materializes and home prices rise in the meantime? You might shave a little off your monthly payment eventually, only to end up paying more for the house itself.
Unfortunately, several economic factors are making it harder for mortgage rates to fall significantly. Inflation has been rising, and the Federal Reserve hasn’t cut interest rates. Few forecasters expect a steep drop anytime soon. On top of that, affordability is already stretched thin for plenty of households.
So where does that leave home prices? If rates stay high through the rest of the year, will prices finally cool or keep climbing upward? We spoke with several mortgage and housing experts to get a better idea of how home prices might react to mortgage rates for the rest of the year. Below, we’ll outline what they expect to happen next.
See what mortgage rate offers you may qualify for here.
What could happen to home prices if mortgage rates stay high this year?
Home prices have cooled despite elevated interest rates, which may stay stuck around 6.5% or higher. “If mortgage rates stay near their current levels, expect asking prices to keep softening and sale prices to follow with a lag,” says Realtor.com Senior Economist Jake Krimmel. “Nationally, list prices are already down 2.4% year over year in May, the steepest annual decline in our data going back to 2017. And unlike many recent housing trends, this is broad-based, not a regional story. Prices are falling in 41 of the top 50 metros and across all four major regions.”
What happens to home prices may come down to buyer demand. “If mortgage rates stay high the remainder of the year, home prices will start falling. It’s the basic premise of supply and demand. If the demand starts to fall due to higher rates, the supply will increase, and home prices will slowly fall,” says Jeremy Schachter, branch manager at Fairway Independent Mortgage Corporation in Phoenix, Arizona. In that case, buyers may gain a little more negotiating power if demand continues to slow.
Many buyers are hopeful that mortgage rates will fall this year, which could potentially happen if the Iran conflict ends, inflation cools and other economic factors improve. But if mortgage rates fall later this year, home prices may not fall with them.
“If mortgage rates come down, more buyers will come into the market, and home prices may stabilize or even increase,” says Schachter. Lower rates could attract more buyers, which could lead to higher home prices.
The experts we spoke with generally don’t anticipate rates dropping soon, however. “I just don’t see that happening because there are too many built-in shipping costs and things that have been affected by the war,” says Jeff Lichtenstein, CEO at Echo Fine Properties in Palm Beach Gardens, Florida. “But if they did, I think you would see a continuation of what was happening right before the war started when rates hit 5.99% and the activity started to heat up.”
And therein lies the rub: If you’re waiting for mortgage rates to come down, a lower rate could make your monthly payment more affordable. But it could also bring more buyers into the market and drive home prices higher. So if you find the right home, it may make sense to purchase it now and refinance later if rates drop to lock in today’s price before competition heats up.
Many buyers have already stopped holding out for a drop. “I strongly believe that buyers have adjusted their expectations and their budgets to take into consideration the higher interest rates, and they do not want to wait around for rates to drop,” says Maria Kourepenos, a real estate agent at Coldwell Banker Warburg in New York City. She also notes that many homeowners “remain ‘wedded’ to their lower-rate mortgages” and are reluctant to move because today’s higher mortgage rates can make a new home less affordable. As a result, the supply of homes for sale remains low.
Learn more about your current mortgage options here.
Smart buyer moves in today’s housing market
If home prices and mortgage rates stay high, there are still ways to make buying a home more affordable, such as:
- Don’t focus only on the home price: When comparing homes, look at the full monthly payments, even if homes have similar listing prices. Property taxes and insurance costs can vary widely, which means two closely priced homes can have very different monthly costs.
- Take advantage of builder incentives: Look at new homes, where builders may offer incentives like rate buydowns.
- Be willing to compromise: Consider a smaller home or fixer-upper that may be more affordable.
- Wait for the slow season: “If a buyer can have a little patience and not feel the need to be all move-in ready for September, waiting until August or post-Labor Day might be the right call, because historically the market does slow down and sellers might get a little more anxious to sell,” says Kourepenos.
The bottom line
If mortgage interest rates stay high, home prices may come down slowly. But if rates fall, it could increase competition for homes and cause prices to rise. Either way, don’t try to time the market. Consider buying only if you truly love the home and the monthly payment, property taxes and other housing costs fit comfortably within your budget.