Mortgage Rates Hit 3-Year Low

We have good news for people who are looking to save when buying a home in 2026. The average rate for a 30-year fixed-rate mortgage just dropped to 6.06%. That is the lowest the rate has been since September 2022. A year ago, the rate was 7.04%, so that is a substantial year-over-year decrease.

The CPI Inflation Report was forecasted at 0.3%, but ended up being 0.2%. The lower mortgage rates are a result of the inflation rates in the report being lower than projected.

The rates also dropped because the government ordered the Federal Housing Finance Agency to buy $200 billion in bonds from Fannie Mae and Freddie Mac. This is similar to what happened during COVID. Policy decisions like this one are not surprising in light of the upcoming 2026 midterm elections.

Is Now the Time to Buy a Home?

You are probably wondering whether to move on a home now, or wait to see if rates drop even further or if housing prices go down.

We would not recommend waiting. Some degree of stabilization in home prices is expected in 2026. There are markets where there might be a slight decrease. But there are others where home prices are expected to continue rising.

We are also living in times of uncertainty. In such times, real estate is an especially valuable investment. It is a tangible asset that has real world value through the utility it provides. Regardless of what happens with the markets or the value of the US Dollar, your home will still be a place where you can live. Depending on your scenario, there might also be opportunities to “hack” your mortgage by renting out a room to a tenant.

When you buy a home, you make a down payment, and then start making your monthly mortgage payments. The sooner you do this, the sooner you begin building equity. That is an investment in your future. If the value of your home increases, so does the value of your equity.

Benefits of Lower Mortgage Rates

Here are some reasons to lock in affordable mortgage rates:

• Keep payments manageable: When your mortgage rate is lower, so is the monthly payment due on your home loan. This helps to keep homeownership affordable and your overall finances more stable and manageable. It may also leave more room in your budget to pay for home upgrades and repairs, new furniture, etc.

• Afford more home: Being able to save on interest may mean you can take on a larger monthly payment if you want to. That could translate to being able to afford a larger home, or one with more expensive features. It could also give you more choice about what neighborhood to live in.

• Reduce uncertainties: If you choose a fixed mortgage rate, rather than an adjustable one, the rate you lock in when you buy your home will still be your rate years in the future, and for the rest of your loan term. You do not have to worry about your rate going up if rates climb for everyone else. Your home should remain affordable, assuming there are no other changes in your financial situation.

• Pay off your loan sooner: With a lower mortgage rate, you may be able to afford to make extra mortgage payments. Getting your mortgage paid off early can be a great feeling, and simplify your financial life.

• Save on total interest: You will owe less interest each month, of course. But you also will owe less interest over the lifetime of your mortgage if that term is shorter due to you managing to pay it off sooner.

If interest rates in the future drop even more, you have the option of refinancing. Doing so involves some costs. But in many cases, a refinance can pay for itself over time. That is another reason why it makes sense to buy a home now, rather than waiting. You are locking in a rate, but you are not necessarily stuck with that rate forever if a new opportunity arises in the future.

Buy a Home with Affordable Mortgage Rates

If you want to take advantage of today’s low mortgage rates, we can help you lock in these affordable rates. Buy a home or refinance in Missouri or 40 other states quickly and easily as we walk you through the process step-by-step. To get started, please give us a call at (816) 631-9687 to schedule your consultation.