Understanding Today’s Mortgage Rates: Is 3% Coming Back?

Understanding Today’s Mortgage Rates: Is 3% Coming Back?

Many buyers are hitting pause on their home search right now, hoping mortgage rates will drop—maybe even return to the record-low 3% seen a few years back. But here’s the reality: those ultra-low rates were temporary and tied to a very unique economic period. As the housing market stabilizes, it’s important to shift expectations.

In 2020 and 2021, 3% mortgage rates provided a major advantage—greater affordability and more buying power. But those rates stemmed from emergency measures during the peak of the global pandemic. With today’s different economic conditions, mortgage rates have risen into the high 6% to low 7% range.

While experts expect a gradual decrease later this year, most agree those 3% rates won’t be returning. Forecasts generally predict that mortgage rates will level out in the mid-6% range by year-end, unless major economic changes occur. As Kara Ng, Senior Economist at Zillow, puts it:

“While Zillow expects mortgage rates to end the year near mid-6%, barring any unforeseen shocks, that path might be bumpy.”
What Buyers Should Know

Waiting for 3% mortgage rates could take far longer than expected—and cost you opportunities in the meantime. Rather than holding off indefinitely, it’s smarter to create a strategy focused on what’s within your control: budgeting, improving your credit, and working with a knowledgeable professional who understands the current market and how to guide you through it.

Having a skilled real estate agent and a reliable lender is key. These professionals can connect you with down payment assistance, explore alternative loan options, and offer expert strategies to help your homebuying goals become a reality.

Here’s something else to consider: if mortgage rates do decrease, more buyers are likely to re-enter the market. Taking action now—while inventory is higher than it’s been in recent years—may give you a head start.

Think about what happens if rates fall: many others will dive back in too.

Getting ahead of that wave could put you in a better position to find your ideal home with fewer competing offers. Realtor.com explains it clearly:

“Staying out of the market in hopes of a rate drop that never comes can lead to missed opportunities . . . Rising home prices, rent increases, and inflation might outpace any future savings on interest. And if rates do fall sharply again, buyers could face an entirely different challenge: surging competition.”

Bottom Line

Those 3% mortgage rates from the past were a rare event—not the norm.

As rates settle into new ranges, now is a smart time to adjust your outlook and understand where the market is going.

A local real estate agent and a trusted lender are the best people to help you stay informed, weigh your options, and map out a strategy that fits your goals.