Waiting for 5% mortgage rates? Why homebuyers may be waiting years — and what it could cost them

Many homebuyers are waiting for mortgage rates to fall before purchasing a house. However, a new survey by Neighbors Bank, a lender in Columbia, Missouri, reveals that many buyers may be unaware of the current mortgage rates. Only 35% of respondents correctly knew the average 30-year mortgage rate range, while 45% incorrectly guessed a higher rate.

This suggests that some people may be looking for rates from the past, which could lead to longer waiting periods. The survey also found that 72% of respondents have put their home searches on hold while waiting for better mortgage rates. Millennials have been the most affected, delaying their home searches by an average of 14 months.

Buyers expecting a 5% mortgage rate may be waiting for an extended period, as major housing forecasters do not anticipate rates to drop that low anytime soon. In January 2021, the average 30-year fixed mortgage rate was 2.65%, but it has since risen to 6.66% by August 2026. The survey also highlights the financial consequences of waiting, with 49% of respondents citing rising rents as a reason to delay saving for a down payment.

Additionally, 67% of respondents noted that homes they're looking at now cost more than when they first started searching. While some buyers are willing to wait for the perfect rate, others are starting to regret their decision. Among those who delayed buying, 41% expressed regret, worrying that they should have purchased earlier.

Experts predict that mortgage rates will remain between 6% and 6.5% for the next three years, and Federal Reserve officials are more likely to make a rate hike in 2026 than a cut.