When will mortgage rates go down to 4%?

Core Insights - Mortgage rates are currently in the low-to-mid-6% range and are not expected to return to 4% in the near future, with predictions suggesting a gradual decline over the next five years as inflation stabilizes and the Federal Reserve adopts a more accommodative stance [2][11][12] Group 1: Current Mortgage Rates and Predictions - Interest rates on 15- and 30-year fixed-rate mortgages are unlikely to return to 4% soon, with expectations of slight decreases as economic conditions improve [2] - The 10-year Treasury yield is closely linked to mortgage rates, and elevated bond yields will keep mortgage rates high [2] - Economists predict that mortgage rates will remain above 6% through 2026, with only gradual declines anticipated [11][12] Group 2: Historical Context and Economic Factors - The historically low mortgage rates of 3.35% in May 2013 were a result of the Federal Reserve's response to the 2007 financial crisis, which included lowering the federal funds rate and purchasing Treasury bonds and mortgage-backed securities [3][4] - Significant economic downturns have historically driven mortgage rates down, and a return to 4% rates would likely require a severe recession and aggressive monetary stimulus [5] Group 3: Buying Strategies and Considerations - Potential homebuyers are advised to focus on their financial situation rather than trying to time the market, as U.S. home prices have only declined seven times in the past 75 years [6][7] - Options for buyers include adjustable-rate mortgages (ARMs), seller-paid buydowns, or shorter-term loans to secure lower rates, with the possibility of refinancing later if rates drop [8][9] - It is crucial for buyers to ensure they can afford monthly mortgage payments, which may include additional costs such as insurance and property taxes [10]