3% Mortgage Rates: Gone for Good or Coming Back Soon?

A lot of buyers are hitting pause right now, holding out hope that mortgage rates will drop, maybe even back to that historic 3% range we saw just a few years ago. But here’s the reality: those rates were never designed to stick around. They were an emergency response to a once-in-a-generation moment. Now that the economy is stabilizing, it’s time to realign expectations.

Back in 2020 and 2021, 3% rates gave buyers a major advantage, more affordability, greater buying power, and a wider range of options. But those rates were driven by aggressive stimulus efforts during a global health crisis. Fast forward to today, and we’re seeing rates settle between the high 6s and low 7s.

While experts do anticipate a mild pullback in the coming months, most industry leaders agree: a return to 3% isn’t on the table. Instead, many forecasts suggest rates could land in the mid-6% range by year’s end, assuming no major economic surprises. As Kara Ng, Senior Economist at Zillow, puts it:

“While Zillow expects mortgage rates to end the year near mid-6%, barring any unforeseen shocks, that path might be bumpy.”

What Buyers Should Keep in Mind

If you’re holding out for 3%, you could be waiting longer than you think—and missing opportunities in the meantime. Rather than delay indefinitely, start focusing on what’s within your control: fine-tuning your finances, building credit, and connecting with a trusted agent and lender who can guide you through this market with clarity and strategy.

Because here’s the key: if rates ease, more buyers are likely to jump back in. That means more competition. Getting ahead of that shift could give you an edge, especially with more homes on the market now than we’ve seen in recent years.

And here’s the biggest thing to keep in mind. Since rates are projected to ease slightly later this year, if that happens, it could bring some more buyers back into the market. Acting now gives you a head start, especially with more homes on the market than we’ve seen in years.

Think about it: if mortgage rates do come down, what do you think everyone else is going to do? That’s right – they’ll jump back in too.

Getting ahead of that rush could put you in a stronger position to find the right home with less competition. Realtor.com sums it up well:

“Staying out of the market in hopes of a rate drop that never comes can lead to missed opportunities . . . Rising home prices, rent increases, and inflation might outpace any future savings on interest. And if rates do fall sharply again, buyers could face an entirely different challenge: surging competition.”

Bottom Line

Let’s be honest—those 3% rates weren’t normal. They were a short-lived window during a unique time.

Now that rates have shifted, it’s a great moment to adjust your expectations and get up to speed on what’s realistic today.

Your best move? Lean on a local real estate pro and a lender who can break it all down and help you build a strategy that works.