Four weeks ago, Freddie Mac had the 30-year fixed rate at 6.95%. By the second week of October it was 7.40%, and it held there this week.
If you’re a buyer in DC, Maryland, or Virginia, that jump changes your monthly payment, and the first question on your mind is probably whether it’s worth waiting for rates to come back down. A new forecast from the Mortgage Bankers Association (MBA), the national group representing the mortgage industry, gives a straight answer. It isn’t the one most buyers want, but it comes with some good news too.
Below is what MBA expects, how buyers are lowering their rates right now, what a 7.4% rate looks like on a DC Metro home, and the questions to ask lenders before you call.
Will mortgage rates go down in 2027? The Mortgage Bankers Association’s baseline forecast, released October 11, 2026, calls for the average 30-year rate to be about 7.3% in the fourth quarter of 2026 and to stay above 7% through the end of 2027. MBA’s chief economist expects rates to ease from the current spike, but not by much. Freddie Mac’s weekly average was 7.40% as of October 15.
What the Experts Expect for Mortgage Rates
MBA Chief Economist Mike Fratantoni shared the forecast at the group’s annual convention in Chicago on October 11. His team expects the 30-year rate to average about 7.3% from October through December and to stay above 7% through the end of 2027.
On how much relief buyers should expect, he said: “I don’t think we’re going to come down that far.”
The main reason is inflation. It’s running well above the Federal Reserve’s 2% goal, and higher energy prices are part of the problem. The Fed raised its key rate in September for the first time since 2023, and MBA expects two more quarter-point increases, one in December and one in the first quarter of 2027.
Mortgage rates move with the 10-year Treasury yield, the return investors earn on 10-year government bonds, which lenders use as a guide when they set rates. MBA expects that yield to average 5.1% this quarter and stay near 5% through 2027.
One more thing worth knowing. MBA also runs scenarios with rates a full point higher and a full point lower than its baseline. It’s a forecast, not a promise.
How Buyers Are Adjusting to 7% Rates
MBA Deputy Chief Economist Joel Kan says buyers who are still shopping are increasingly choosing adjustable-rate mortgages or paying points to lower their rate. ARMs made up almost 10% of applications over the past month, and MBA expects the share to stay above 9% through 2027.
What Is an Adjustable-Rate Mortgage (ARM)?
An ARM gives you a lower starting rate for a set number of years, often five, seven, or ten. After that, the rate can go up or down, so your monthly payment could rise by quite a bit. It can make sense if you’re confident you’ll sell or refinance before the rate adjusts, and it’s a bigger risk if you plan to stay put.
What Are Mortgage Points?
Points are an upfront fee you pay at closing to lower your rate for the life of the loan. One point equals 1% of your loan amount, so on a $607,500 loan, one point is $6,075. How much one point lowers your rate varies by lender and loan, which is why it’s worth asking for the exact numbers and how many years it would take for the lower payment to make up for the cost.
The right choice depends on how long you plan to stay in the home and how much cash you’ll have at closing. A lender can run both options side by side.
What a 7.4% Rate Looks Like on a DC Metro Home
Here’s a simple way to see what this spike does to a payment. DC Metro’s median sold price was $675,000 in June (Bright MLS). With 10% down, that’s a loan of $607,500. These numbers are principal and interest only, so taxes, insurance, and HOA fees come on top.
- At today’s 7.40%: about $4,206 a month
- At 6.27%, where rates stood a year ago: about $3,748 a month
Same house, same loan, about $460 more a month, or roughly $5,500 a year, from the rate alone.
What This Means If You’re Waiting to Buy
If MBA is right, waiting for rates to fall well below 7% could mean waiting until 2028 or beyond. MBA also projects purchase lending to grow by less than 1% next year, so don’t count on a big rebound in activity either.
Nobody can time this perfectly. In our look at 23 years of data, buying now beat waiting two years in 61% of scenarios, and the rate alone didn’t decide the outcome. If you do buy and rates fall later, you’ll have the option to refinance, though that’s never guaranteed and comes with its own closing costs.
If you’re planning to buy in the next year, it also helps to rate-proof your budget so a move in either direction doesn’t knock you out of your search.
Questions to Ask When You Call Local Lenders
Rates and fees vary from one lender to the next, so talk to more than one. Bring these questions to each call:
- How much would it cost to buy points, and how many years would it take for the lower payment to make up for that cost?
- If I go with an ARM, how long does the starting rate last, and how high could my payment go after that?
- What rate and APR can you offer me on a 30-year fixed loan right now?
- What fees are included in your Loan Estimate?
- How long can I lock my rate, and what happens if rates change before closing?
Ask each lender for a Loan Estimate, a standard form that spells out your rate and closing costs. Laying them side by side makes it much easier to compare offers.
If you’re not sure who to call first, our preferred lender, Will Mitchell at First Savings, is a good place to start. I’d still get at least one more Loan Estimate to compare.
Based on MBA’s forecast, rates above 7% look likely to stick around for at least another year. Getting your loan questions answered early gives you a clearer picture of your budget before you start touring homes.
FAQ: Mortgage Rates and Buying a Home
Will mortgage rates go down in 2027?
The Mortgage Bankers Association expects 30-year rates to ease from the current spike but stay above 7% through the end of 2027. Its baseline forecast calls for about 7.3% in the fourth quarter of 2026.
What is the current 30-year mortgage rate?
Freddie Mac’s weekly survey put the 30-year fixed rate at 7.40% as of October 15, 2026, the same as the week before and up from 6.95% in mid-September.
Should I wait to buy a house until mortgage rates drop?
Nobody can predict rates with confidence, and the MBA does not expect a large drop. A better approach is to run your numbers at today’s rate, compare lenders, and decide based on whether the payment fits your budget.
What is the difference between an ARM and a fixed-rate mortgage?
A fixed-rate mortgage keeps the same rate for the life of the loan. An ARM starts with a lower rate for a set number of years, then the rate can rise or fall, so your payment may increase.
What are mortgage points?
Points are an upfront fee paid at closing to lower your interest rate for the life of the loan. One point costs 1% of the loan amount.
Buying in DC, Maryland, or Virginia at today’s rates? Edward Slavis and the team can run real payment scenarios with you before you start touring homes.
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