Equal Housing Lender Logo

Rich Hanlin

An administration advisor predicted mortgage rates could ease over the next few months, but current US borrowing costs recently climbed back above 7%.
Mortgage professionals said faster declines look difficult because persistent inflation fears, elevated energy costs, geopolitical risks, tariffs, and higher Treasury yields could keep rates elevated.
Experts said buyers who can comfortably afford a home now may still move forward, then refinance later, since higher rates can help keep prices lower.
On a $400K to $500K purchase, a move from low-7% rates to mid-5% rates could meaningfully cut payments, but waiting may invite price competition.
Rates may normalize in 2027 as inflation moderates, and buyers should compare financing options like buydowns or ARMs for better long-term fit.

US Buyers Weigh Rates and Timing

30-yr mortgage avg. recently reached ~7.3%, up from ~7% weeks earlier, pushing principal and interest on a $400K loan to ~$2.7K before taxes.
Some buyers turned to parents, grandparents, or relatives for home financing, keeping interest payments within the family instead of sending them to a bank.
Federal minimum lending rates in Early-Q4 2026 sat near ~5%, creating a gap with conventional mortgages and making properly structured family loans potentially cheaper.
Interest is not automatically deductible: the debt generally must secure the home, the borrower must own it, itemize, and both sides must document repayment.
Families facing >7% mortgages can use properly structured family loans to cut borrowing costs while managing taxes more efficiently when the arrangement is documented carefully.