Table of Contents

Mortgage Forecast: 6% Rates Still on the Horizon, but Not in Time for Spring

Here's why we probably won’t see any major drops in mortgage rates before the upcoming homebuying season.

Why You Can Trust CNET Money
Our mission is to help you make informed financial decisions, and we hold ourselves to strict . This post may contain links to products from our partners, which may earn us a commission. Here’s a more detailed explanation of .
Yutthana Gaetgeaw/Getty Images

Roughly 72% of potential homebuyers say homeownership would be financially feasible if mortgage rates fell below 5%, according to a recent survey from That means mortgage rates would need to drop by at least 2% to unlock today’s unaffordable housing market

But there’s a problem. Major forecasts don’t call for mortgage rates to slip under 6% until 2025. 

Between last November and early January, the average rate for a 30-year fixed mortgage, the most popular home loan type, fell from a high of 8.01% to the mid-6% range, according to Bankrate, CNET’s sister site. However, throughout February, rates have gone up and kept steady at around 7.25%. 

Though mortgage rates aren’t expected to fall dramatically this year, any dip is good news for homebuyers. If home loan rates manage to reach the low-6% range by the end of the year, it would increase housing affordability for a large number of families who have been stuck on the sidelines. 

Will 6% be the magic mortgage rate to kick-start the housing market? Or will we need to wait for 5% rates a year from now? Here’s what experts are saying.

Mortgage rates: Rise like a rocket, fall like a feather?

The recent surge in mortgage rates was fueled by hotter-than-expected inflation and labor data, which sent the 10-year Treasury yield (a key benchmark for the 30-year fixed mortgage rate) higher. But in some ways, rates were just recalibrating to an appropriate level. 

“Investors got a little ahead of themselves in terms of expectations for lower rates this year,” said Keith Gumbinger, vice president of mortgage site Given the state of the economy -- like sticky inflation and the Federal Reserve’s reactive monetary policy -- financial markets may have been overly optimistic in projecting when interest rate cuts would start.

After nearly two years of aggressive interest rate hikes to tame inflationary pressures, the Fed signaled in December it would likely cut rates three times in 2024. Though the Fed doesn’t directly set mortgage rates, a lower federal funds rate, combined with cooler inflation, would help mortgage rates go down. 

Overall forecasts still project mortgage rates to decline, but exactly when and by how much is murkier. Before adjusting the federal funds rate, the central bank wants to see inflation steady at its 2% year-over-year target.

Even if economic data points to a slowdown, mortgage rate movement will likely be slow and gradual, so 5% rates aren’t in the cards this year. 

Read more: Mortgage Predictions: How Labor Data Could Impact Mortgage Rates in 2024

Will mortgage rates go below 6% this year?

Mortgage rates tend to be volatile and preemptive. Rate movement depends not on what’s happening now, but on what investors and lenders believe will happen in the future, according to Orphe Divounguy, senior economist at Zillow Home Loans.

“Today’s mortgage rates, to some extent, already reflect expectations of slowing economic growth and future Fed rate cuts,” Divounguy said. 

While next month’s economic data could change the equation, expectations for mortgage rates haven’t changed much. Rates in the low-6% range are still possible in 2024, just not in time for the spring homebuying season.

What the experts are saying

“If we’ve learned anything over the past few years, it is that mortgage rates and other financial conditions can shift rapidly as conditions change. My base expectation is that mortgage rates will decline more gradually and not break below 6% in 2024.”



“As the Federal Reserve holds interest rates steady before beginning to slowly cut rates in May, the spread on the 30-year fixed-rate loan and the 10-year Treasury bond will normalize, and mortgage rates gradually will fall. That said, forecasting mortgage rates is challenging, and near-term volatility is likely. While the rate will trend lower, there is uncertainty in the month-to-month movement in rates.”



A 6-8% range can be a possible outcome if inflation remains stickier and higher than expectations, and the Fed does not cut until much later than the second half of this year. If the soft landing scenario occurs, then we could see a range closer to 5-7% once the Fed starts to cut rates later in 2024.”



“I don’t think present conditions change the overall forecast for mortgage or other interest rates all that much, but sustained higher economic growth or more persistent inflation would.”

Is 6% an affordable mortgage rate? 

Today’s mortgage rates feel high, even if they’re not in a broad historical sense.

Most prospective first-time homebuyers have witnessed low rates over the past decade, especially when they hit rock bottom in the 2% to 3% range during the pandemic. Current buyers likely weren’t on the market for a home in the 1980s, when rates peaked above 18%. 

What’s considered an affordable mortgage rate depends on your financial situation. Broadly speaking, a good mortgage rate is generally at or below the national average. The median 30-year mortgage rate since 1971 is 7.4%, according to Freddie Mac.

For many homeowners, the mortgage rate they start with is only temporary: They refinance to a lower rate when mortgage rates drop. 

Mortgage rates feel so high nowadays because of the housing market’s overall affordability crisis. Home prices keep rising, inflation is cutting into wages, and debt from credit cards and student loans continue to chip away at savings. All those factors combined have put homeownership out of reach for middle-income and low-income Americans. 

Comparing 6% vs. 7% vs. 8% mortgage rate

If you’ve been waiting for rates to plummet before buying a home, doing some basic calculations might change your perspective. Yes, a 6% mortgage is higher than just four years ago. But it’s still a better deal than an 8% or even 7% mortgage rate. 

What difference does 1% or 2% make?

Does a 1% drop in mortgage rates make a difference in your monthly payment? The answer is yes. What about a 2% drop? Even more.

Using CNET’s mortgage calculator, we did the math to demonstrate what a 1% or 2% difference can make on your home loan payment. In the chart above, we assumed a 20% down payment on a $500,000 home, making a total loan amount of $400,000 with a 30-year fixed term comparing a 6%, 7% and 8% rate.

Getting a home loan at a 6% interest rate versus a 7% rate gives you savings of $263 a month. That’s $3,156 a year and $94,683 in total interest over the life of your loan.

The savings are even bigger when comparing a 6% interest rate with an 8% rate: The lower rate saves you $537 per month, $6,444 per year and $193,267 in total interest paid.

Pro Tip: Even if you’re getting a lower interest rate, pay attention to lender fees and other costs. Excessive fees or mortgage “discount” points are often hidden and can offset the savings.


For example, a lender might advertise a below-average rate, let’s say 6%. But that’s often based on the borrower having an excellent credit score and paying discount points in exchange for that low rate, which can cost thousands of dollars upfront. Each mortgage discount point results in a 0.25% decrease in your rate but will typically cost 1% of the loan amount.

How to get a lower mortgage rate

While it’s important to keep track of current mortgage rate trends, the best thing to do is focus on doing things like improving your credit score, paying off debt and saving for a bigger down payment

Many mortgage lenders advertise lower-than-average interest rates. But to qualify for those low rates, you’ll need to have excellent credit, a low debt-to-income ratio and (typically) a down payment of at least 20%. 

Experts also recommend comparing loan offers from at least two different mortgage lenders to help you secure the best deal.  

Mortgage payment calculator

Katherine Watt is a CNET Money writer focusing on mortgages, home equity and banking. She previously wrote about personal finance for NextAdvisor. Based in New York, Katherine graduated summa cum laude from Colgate University with a bachelor's degree in English literature.
Advertiser Disclosure

CNET editors independently choose every product and service we cover. Though we can’t review every available financial company or offer, we strive to make comprehensive, rigorous comparisons in order to highlight the best of them. For many of these products and services, we earn a commission. The compensation we receive may impact how products and links appear on our site.

Editorial Guidelines

Writers and editors and produce editorial content with the objective to provide accurate and unbiased information. A separate team is responsible for placing paid links and advertisements, creating a firewall between our affiliate partners and our editorial team. Our editorial team does not receive direct compensation from advertisers.

How we make money

CNET Money is an advertising-supported publisher and comparison service. We’re compensated in exchange for placement of sponsored products and services, or when you click on certain links posted on our site. Therefore, this compensation may impact where and in what order affiliate links appear within advertising units. While we strive to provide a wide range of products and services, CNET Money does not include information about every financial or credit product or service.