Home buyers may need to prepare for higher borrowing costs sticking around. Thirty-year mortgage rates are projected to average 7.3% in late 2026 and remain above 7% throughout 2027, according to the Mortgage Bankers Association. Persistent inflation, elevated Treasury yields and the potential for additional Fed rate hikes may prolong high mortgage costs. Consequently, lending activity could decline next year, particularly refinancing, while more buyers consider adjustable-rate mortgages, as reported by Keith Griffith for Realtor.com. MBA’s outlook also points to slower home-price growth in 2027.

Joel Kan, MBA’s deputy chief economist, said that over the coming years, lower housing demand could come in the form of slower population growth as well as lower immigration. Still, NAR recommends buyers and homeowners plan carefully, compare financing options and focus on what fits their long-term budgets rather than waiting for a sudden drop in interest rates.