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While interest rates might not fall all the way to 3% again, what about 4%? Even before the COVID-19 pandemic, rates lingered at or below 4%. Currently, rates are hovering in the low-to-mid-6% range. And while you should consider many factors when considering whether to buy a house, securing a low mortgage interest rate can lead to significant savings.

MORE: See our top picks for mortgage lenders right now.

Interest rates on 15- and 30-year fixed-rate mortgages are not likely to return to 4% anytime soon.

“We expect that mortgage rates will fall over the next five years,” said Charles Goodwin, head of bridge and DSCR lending at Kiavi, via email. “As inflation stabilizes and the Fed eventually shifts to a more accommodative stance, rates could fall slightly, although not to the previously historically low levels where they once were.”

Mortgage rates are closely tied to the 10-year Treasury yield. Lenders set rates partly based on the yield to make mortgage-backed securities (MBSs) attractive to investors. If the bond yield remains elevated, so do mortgage rates.

Discover the mortgage lenders with the lowest rates this week.

Rates on a 30-year fixed mortgage reached 3.35% in May 2013, the lowest mortgage rates in history (at the time). These lows were brought on by the years-long response to the 2007 financial crisis, during which millions of U.S. homeowners faced foreclosure on their houses, many of which had subprime mortgage loans, and financial institutions collapsed.

In response to the crisis, the Federal Reserve lowered the federal funds rate to near 0%, similar to its policy during the COVID-19 pandemic. It also purchased large amounts of Treasury bonds and mortgage-backed securities, which encouraged lending and made borrowing cheaper.

The significantly reduced rates of 2010 and, more recently, 2020 were driven by major economic downturns. It’ll likely take similar seismic events to see rates drop that far again.

“Returning to a 4% mortgage rate would likely require a deep recession, a sharp rise in unemployment, and more aggressive monetary stimulus,” noted Goodwin. “The recession would need to be more severe than most forecasters' current base case.”

Read about how mortgage rates respond in a recession.

When deciding the right time to buy a home, it’s best to focus on your financial situation. Broader economic trends are difficult to predict and rely on several intertwining factors, but you have some level of control over your own finances.

“Trying to time the market rarely works in real estate,” said Stephen Clyde, REALTOR® and CEO of Stephen Clyde Real Estate Group, via email. “Over the past 75 years, U.S. home prices have only declined seven times. Plus, there are several advantages to buying now, like less competition and more room to negotiate on prices, repairs, and closing costs.”

If you’re ready to buy now, consider an adjustable-rate mortgage (ARM), a seller-paid buydown, or a shorter-term mortgage loan to keep your rate low. And remember, you can always refinance your loan later if rates drop.

Rates on ARMs can be lower than fixed mortgage rates, at least initially. However, your interest rate can fluctuate periodically based on economic conditions, so you could get stuck with a higher rate later.

With a seller-paid buydown, the seller pays money to lower the buyer's rate. It’s usually a temporary rate buydown, but it can be for the life of the loan if the seller pays for discount points at closing.

Mortgage lenders typically offer lower mortgage rates on shorter loan terms (e.g., on a 15-year mortgage versus a 30-year one). You’ll pay less in interest over time, but since you’re paying off the same principal amount in a shorter time, your monthly payments will be higher.

Regardless of your loan type, make sure you can afford the monthly mortgage payment. In addition to principal and interest, your payment can include homeowners insurance, property taxes, and private mortgage insurance, if required.

Learn more: How are people affording houses in today's market? 10 expert-backed tips for buyers.

Mortgage interest rates rose significantly in 2022 as the Federal Reserve responded to inflation. After setting the federal funds rate near 0% in the height of the pandemic, the Fed raised rates 11 times in 2022 and 2023 in an effort to slow down the economy. Raising the federal funds rate made borrowing more expensive, which impacted consumer borrowing on products like auto and home loans.

It is highly unlikely that mortgage rates will drop to 4% in 2025. While rates may inch down, many economists expect them to remain above 6% through the rest of the year and possibly into 2026.

Interest rates are difficult to predict, especially further out. You’ll be hard-pressed to find expert predictions extending past 2027. However, some experts anticipate future Federal Reserve rate cuts, so they expect a gradual decline in interest rates. Most expect rates to stay above 6% through 2026. These predictions can change depending on U.S. and global economic conditions, as well as the central bank’s response.

With mortgage rates hovering around 6%, is now a good time to refinance your loan? Learn about the factors to consider when deciding if you should refinance.

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