If you’re waiting for mortgage rates to fall, don’t miss the move. Mortgage rates have dropped for the third week in a row. Can it be the beginning of a trend of mortgage rates going down?

Are mortgage rates dropping?

Yes, this week they did yet again. As of Nov. 5, Freddie Mac reported that the average 30-year fixed-rate mortgage fell eight basis points to 7.18%. At this time in November 2025, mortgage rates averaged 6.22%, 96 basis points lower.

The average 15-year fixed mortgage rate this week was 6.57%, down three basis points from last week, and are 1.07 percentage points higher than this time last year.

Here’s the Freddie Mac mortgage rate spread from low to high over the past 52 weeks as of Oct. 22, 2026:

• 30-year fixed-rate mortgage: 5.98% to 7.4%
• 15-year fixed-rate mortgage: 5.35% to 6.73%

Will mortgage rates trend down in 2027?

The 10-year Treasury yield, a benchmark for mortgage rates, has recently fallen from 24-year highs. However, persistent concerns about the Middle East conflict, oil prices, and inflation keep the bond market jittery.

With the mid-term elections over, the housing industry is looking for clues to the future. 

“The Democratic sweep shuffles control of the legislative branch, but the economic impact, which is fundamental for the U.S. housing market, is far less clear,” Jake Krimmel, senior economist with Realtor.com, said in a statement. “Surging mortgage rates caused the housing market to hit pause this fall, with buyers stepping back first and sellers following. Jumpstarting the housing market relies on a calmer geopolitical environment and bond market in the short run and more housing supply plus a more dynamic labor market in the long run.”

Krimmel noted that the 21st Century Road to Housing Act, which became law this summer, was one of the rare bipartisan achievements of the 119th Congress that aimed to boost housing supply. 

“It may serve as a model for the types of cross-aisle policies that Democrats can get across the line,” he added.”

The latest forecasts from the Mortgage Bankers Association and Fannie Mae expect mortgage rates to be over 7% and as high as 7.5% in 2027.

The Fed plans a second rate hike

Following the Federal Reserve’s first interest rate increase in three years, the Federal Open Market Committee (FOMC) signaled it is leaning toward another 0.25% hike before year-end.

The federal funds rate tends to directly influence rates on shorter-term lending rates. While mortgage rates aren’t directly based on the fed funds rate, they typically mirror fed funds rate trends. 

So, if the fed funds rate goes up, mortgage rates are likely to follow.

Keep an eye on 10-year Treasury yields

While short-term lending rates closely follow the Fed funds rate, mortgage rates track the 10-year Treasury yield even more closely. As of Nov. 5, the 10-year Treasury yield opened at 4.90% — compared to 4.11% a year prior.

Now, you’re probably wondering why today’s mortgage rates aren’t in the 5% range, right?

To determine current mortgage rates, lenders add a “spread” to the 10-year Treasury yield. The spread is simply the difference between the rates consumers pay and the 10-year Treasury rate. Without getting too much into the weeds, charging a spread helps mortgage lenders cover the costs of making loans to the public and the risk of providing them.

Mortgage spreads widened over the past few years, exceeding two percentage points. As bond yields have risen over the past six months, the spread has narrowed slightly but remains near two percentage points. 

For example, the average 30-year fixed mortgage rate is 7.18%, and the 10-year Treasury yield is 4.90% — a spread of 2.28 percentage points.

Should you wait to buy until mortgage rates go down even more?

Waiting for mortgage rates to improve can lower a monthly payment significantly, but does not guarantee a cheaper home purchase, says Jeremy Olsher, principal at Mizner Residential Group in Compass, Fla. 

“If rates fall enough to bring more buyers back, the benefit can be partly absorbed by stronger competition,” he said. “A buyer might secure a better rate but pay more for the property, face multiple offers or have less negotiating room.”

Olsher noted that prospective buyers should consider all of the costs of homeownership, including not only principal and interest, but insurance, property taxes, homeowner association fees, and maintenance. 

“If that total is uncomfortable, the buyer may need to wait, reduce the price range or reconsider the type of property. The calculation should work without assuming that refinancing will become available later,” Olsher said.

“Refinancing can be an option if rates eventually fall, but it should not be the reason someone accepts an unaffordable payment today,” Olsher added. “The purchase needs to stand on its own using the numbers the buyer can actually secure.”

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Strategies for buyers in today’s mortgage market

If you crave the comforts of homeownership, the best strategy in today’s market may be to buy what you can afford. Whether that means a smaller house or a condo instead of a single-family home, owning something puts you in a position to start building equity.

Yes, shopping for the best mortgage lenders with low rates and fees is crucial when getting a mortgage. But to help you find your ideal home that balances affordability and desirability, it pays to adopt a curious mindset and consider lesser-discussed financial tools.

Get curious

There’s no better time to learn more about your local real estate market than today. By adopting a sense of curiosity, you could discover that your city has more to offer housing-wise than you previously thought.

You may want to take weekend excursions to lesser-known neighborhoods and suburban developments beyond the city limits. You never know what you’ll find that could expand your idea of what “home” looks like — including new developments, school districts, and types of homes.

Consider a fixer-upper

If you’re looking to spend less on a home in today’s mortgage market, a house needing a bit of TLC could help you do just that. Loans like the FHA 203(k) mortgage can roll your purchase and renovation costs into one convenient loan. When you qualify and have an accepted offer, your lender immediately funds the home’s purchase price and puts the renovation costs into an escrow account. As you make repairs, funds get disbursed.

Rethink your commute

How would it feel to have a longer commute yet come home to a house you love? Master-planned communities tend to crop up outside major cities, offering various amenities like parks, shopping, and top-notch schools — all in exchange for a longer commute. These areas could look a lot more palatable if they offer commuting options like park-and-ride or commuter rail. Dare to consider parking the car and taking public transit if it could get you into the home of your dreams.

Go condo

While shared walls, floors, and ceilings might not immediately scream “dream home,” they could help you find an affordable home in a terrific area. Condominiums come in various shapes and sizes, from apartment-style flats to townhomes. Depending on the area, you might even score a small backyard. However, be sure to consider HOA fees when calculating your monthly payment.

Consider a 15-year mortgage

While the monthly payment on a 15-year mortgage will be higher than a typical 30-year mortgage, these loans have plenty of upsides. Not only will you pay off your home on a speedier timeline, but you’ll also likely score a lower interest rate and save a ton on interest over the life of your loan.

Explore rate buydowns

To make today’s mortgage rates more palatable, look into rate buydown options. An interest rate buydown lets you pay cash up front in exchange for a reduced interest rate on your mortgage. Buydowns can be permanent or temporary, like for your loan’s first one to three years. Even a few years of lower rate relief can make today’s home prices more affordable.