The Mortgage Bankers Association expects 30-year mortgage rates to stay above 7% through the end of 2027. If you already know you’ll buy in the next year, waiting for rates to drop isn’t much of a plan, and the slower months before spring are when buyers usually have the most room to negotiate.
What the MBA just said
At its annual convention this month, the MBA released its updated forecast. It has the 30-year rate averaging about 7.3% for the rest of 2026 and staying above 7% all through 2027. MBA’s economists also expect the Fed to raise rates again in December and once more early next year. (MBA, Realtor.com)
For context, Freddie Mac’s weekly average hit 7.40% on Oct 8, the highest in about three years. A year earlier it was 6.30%. (Freddie Mac)
MBA also pointed out that purchase activity dropped off once rates got into the 7% range, and that more buyers are turning to adjustable-rate loans or paying points to get a lower rate. (BAM)
My take: the rate isn’t coming to save anybody
If you’ve been waiting for rates to come back down before you start looking, I get it. Nobody’s excited about a 7 in front of their rate. I’m not going to pretend it’s comfortable.
But the people whose whole job is forecasting this are telling us it isn’t coming down in any meaningful way next year. Forecasts miss sometimes. Still, “maybe they’re wrong” is a rough thing to build a move around.
So the question changes. It’s not “when do rates drop?” It’s “if this is the rate, how do I get the best deal I can?”
And right now, that question has a better answer than it’s had in a while.
What’s happening in the South Metro
Buyers have stepped back, and homes have piled up.
Nationally, mortgage applications to buy a home were down 15% from a year earlier in early October. (Calculated Risk) You can see the same thing here.
In September, there were 1,166 previously owned homes for sale across the South Metro area I track, up 30.9% from 891 a year earlier. Pending sales went the other direction, down 5.9% (from 376 to 354).
That pushed months of supply to 3.1, up from 2.4 last September. Months of supply is how long it would take to sell every home on the market if nothing new got listed. The higher it goes, the more choice buyers have. And 3.1 is the highest it’s been in my data going back to January 2023.
To be straight with you, 3.1 months still isn’t what most people would call a buyer’s market. That usually takes something closer to six. But it’s the most choice South Metro buyers have had in years, and it’s tilting their way.
I’m seeing more buyers successfully negotiate on price and concessions right now, and the agents in my office are seeing the same thing. A year or two ago, a lot of those asks would’ve been a nonstarter.
Source: Northstar MLS, previously owned homes, my South Metro area, September 2025 vs. September 2026. Data deemed reliable but not guaranteed.
Why the next few months may matter more than spring
Here’s what usually happens around here.
Come February, the buyers who sat out waiting for rates to fall start to realize they’re not falling. New listings show up. Spring does its thing, and everybody comes back at once.
The numbers show it pretty clearly. Pending sales in my area went from 223 in December 2025 to 277 in February and 429 in March. That’s up 92% from December to March. The year before followed the same shape: 218, then 307, then 409. New listings roughly tripled from December to March both years.
If the MBA’s forecast holds, spring buyers will be shopping at the same 7%-plus rate you’d get today. The difference is you’d be competing with all of them.
None of this means you have to buy this fall. If you’re not sure you’ll want to move in the next year, don’t let a forecast rush you into it. But if you already know you will, this stretch deserves a serious look.
Ways buyers are working around a 7% rate
There are more options here than most people realize. A few I’m seeing and talking through with buyers:
- Asking the seller to cover closing costs. With more homes sitting, more sellers are open to it.
- Using seller-paid costs to buy down your rate. Instead of putting a concession toward closing costs, some buyers put it toward points to lower the rate. Loan programs set limits on how much a seller can contribute, so check with your lender first.
- Adjustable-rate mortgages. ARMs were about 10% of applications over the past month, and they’ve been running roughly 0.8 percentage points below fixed rates. (HousingWire) The catch: after the fixed period ends, your rate and payment can go up. Know the worst-case number before you sign.
- Interest-only loans. A few buyers have asked me about these. Payments are lower early on because you’re not paying down the loan yet. That’s also the downside. When the interest-only period ends, the payment jumps. They’re not for most people.
Every one of these has a tradeoff. The right one depends on how long you plan to stay and what your budget can handle if things change. Talk with your lender before you pick one. If you don’t have one yet, I’m happy to connect you with someone I trust.
More on financing in my rates and financing posts and on the buying process in my posts for buyers.
What to watch
- Freddie Mac’s weekly rate, out every Thursday.
- MBA’s weekly mortgage applications, out every Wednesday. It’s the quickest read on whether buyers are coming back.
- The Fed’s December meeting, where MBA expects another quarter-point hike.
- February listings and pendings in the South Metro. That’s when we’ll see whether the spring rush shows up on schedule. I’ll post the numbers.
If rates really do stay above 7% through next year, does that change when you’d buy, or are you still waiting it out? I’d like to hear it.
FAQ
Will mortgage rates go down in 2027?
The Mortgage Bankers Association doesn’t expect much relief. Its October 2026 forecast has 30-year rates staying above 7% through the end of 2027. Forecasts can miss, but that’s the current outlook from one of the main industry groups that tracks it.
Is it a buyer’s market in the South Metro right now?
Not by the traditional definition, which usually means about six months of supply. In September 2026 the South Metro area I track had 3.1 months of supply, up from 2.4 a year earlier and the highest since at least January 2023. It’s tilting toward buyers, and more buyers are negotiating on price and concessions.
Is it better to buy in the fall or the spring?
It depends on your situation, but fall and winter usually bring less competition. In the South Metro, pending sales nearly doubled from December 2025 to March 2026, so spring buyers tend to compete with a lot more people.
Can a seller pay to buy down my interest rate?
Often, yes. Seller concessions can usually go toward points that lower your rate, within the limits your loan program sets. Your lender can tell you exactly what’s allowed for your loan.
Are adjustable-rate mortgages a good idea right now?
They can be for some buyers, especially those who don’t plan to stay long. ARMs start lower than fixed rates, but the rate can rise after the fixed period. Make sure you know the highest your payment could go before choosing one.
Sources
- Mortgage Bankers Association, “MBA Forecast: Mortgage Originations to Decrease 5 Percent in 2027 as Mortgage Rates Remain Above 7 Percent,” Oct 11, 2026. mba.org
- Realtor.com (Keith Griffith), “Mortgage Rates Will Remain Above 7% Through 2027, Top Economist Forecasts,” Oct 11, 2026. Yahoo Finance
- BAM (Sarah Lentz), “Mortgage Rates Above 7% Through 2027, According to MBA’s Latest Forecast,” Oct 13, 2026. nowbam.com
- Freddie Mac, “Mortgage Rates Average 7.40%,” Oct 8, 2026. freddiemac.com
- Calculated Risk, “High Frequency Data: Recent Surge in Mortgage Rates Impacting Existing Home Supply and Demand,” Oct 7, 2026. calculatedrisk.substack.com
- HousingWire, “Mortgage applications fall 6% as rates hit highest level in three years,” Sept 30, 2026. housingwire.com
- Northstar MLS via InfoSparks, previously owned homes, My South Metro Area, January 2023 to September 2026, pulled Oct 14, 2026.
Published Oct 14, 2026 by Travis Wyman.