Will Mortgage Rates Go Down? Here's What the Last Two Years Tell Us

If you're waiting for mortgage rates to fall before buying a home, refinancing, or consolidating debt, you're certainly not alone.

One of the most common questions I hear is:

"Should I wait until rates come back down?"

It's an understandable question. After the rapid rise in mortgage rates over the past few years, many buyers and homeowners are hoping for another dramatic decline before making a move.

The challenge is that no one—not even economists—has a crystal ball.

What we can do is look at historical market behavior to better understand how mortgage rates tend to move and what that means for your financial decisions today.

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In this video, I break down the movement of the 10-Year Treasury over the past two years, explain why mortgage rates don't always follow Federal Reserve decisions, and discuss how to make smart financial decisions even when rates remain unpredictable.

Continue reading below for additional insights that expand on what we cover in the video.

Why Mortgage Rates Don't Move in a Straight Line

One of the biggest misconceptions about mortgage rates is that once they begin falling, they'll simply continue moving lower.

History tells a very different story.

Mortgage rates rise and fall based on many different economic factors. While the Federal Reserve influences short-term interest rates, mortgage rates respond to a much broader picture that includes:

• Inflation

• Economic growth

• Employment data

• Bond market activity

• Investor expectations

• Global events and geopolitical uncertainty

This is why mortgage rates often surprise both consumers and financial experts alike.

What the 10-Year Treasury Shows Us

Although the 10-Year Treasury isn't directly tied to mortgage rates, it serves as one of the market's most important benchmarks.

Looking back over the last two years provides valuable perspective.

September 2024: Optimism Builds

Around September 2024, the 10-Year Treasury yield reached approximately 3.6%, one of its lowest points during this period.

At that time, many believed yields—and ultimately mortgage rates—would continue falling.

Instead, the opposite happened.

Over the following months, including the election season, the yield climbed dramatically, eventually reaching approximately 4.8% by January 2025.

That rapid reversal serves as an important reminder:

Market expectations don't always become market reality.

January 2025: The Peak

By January 2025, Treasury yields reached the highest point on the chart.

Then something interesting happened.

The decline everyone had been waiting for finally began...

...but not in a straight line.

Instead, yields:

• Declined

• Rebounded

• Declined again

• Rose once more

• Fell again

The movement resembled a staircase rather than a smooth downhill slide.

Over roughly nine months, yields gradually moved from about 4.8% to approximately 3.9%.

For many consumers, that improvement felt encouraging.

Unfortunately, it didn't last.

Why Mortgage Rates Started Rising Again

After reaching lower levels in late 2025, Treasury yields once again began moving higher.

Early 2026 brought a brief period of optimism as yields improved.

Then several economic developments shifted investor sentiment.

Geopolitical conflicts increased uncertainty.

Oil prices rose.

Inflation concerns returned.

Economic reports continued influencing expectations about future Federal Reserve policy.

As those factors evolved, Treasury yields began climbing again.

This is one of the clearest examples of why predicting mortgage rates is so difficult.

Even when trends appear favorable, unexpected events can quickly change the direction of the market.

Does the Federal Reserve Control Mortgage Rates?

Another common misunderstanding is that mortgage rates automatically fall whenever the Federal Reserve cuts interest rates.

That's not how mortgage pricing works.

The Federal Reserve primarily controls short-term interest rates, affecting products like:

• Credit cards

• Home equity lines of credit (HELOCs)

• Auto loans

• Savings rates

Mortgage rates are different.

Long-term mortgage pricing is influenced by:

• The bond market

• The 10-Year Treasury

• Inflation expectations

• Employment reports

• Investor confidence

• Overall economic outlook

Sometimes mortgage rates improve after a Fed announcement.

Other times they increase—even after a rate cut.

Why?

Because markets react not only to what the Federal Reserve does, but also to what investors believe will happen next.

Waiting for the Perfect Rate Can Be Expensive

It's completely reasonable to hope mortgage rates improve.

In fact, they likely will at different points over time.

The question is whether your financial goals should depend entirely on that happening.

If you're postponing buying a home solely because you're waiting for rates to drop by one or two full percentage points, you're no longer following a financial plan.

You're making a market prediction.

History has shown just how unreliable those predictions can be.

Expert Insight

"Mortgage rates are going to continue rising and falling. The real question isn't whether they'll move—it's whether today's numbers already help you accomplish your financial goals." — Amber Jones, Certified Mortgage Advisor

A Better Question to Ask

Instead of asking:

"When will mortgage rates finally come down?"

Consider asking:

• What monthly payment fits comfortably within my budget?

• Does buying now solve my housing needs?

• Will homeownership allow me to begin building equity today?

• Could refinancing improve my monthly cash flow?

• How long would it take to recover refinancing costs?

• How long do I expect to stay in this home?

These questions shift the focus away from trying to predict the market and toward making informed financial decisions based on your personal situation.

After all:

We live in our monthly payments—not the interest rate attached to them.

Buying or Refinancing Should Always Be Based on Your Numbers

This doesn't mean everyone should buy today.

It also doesn't mean everyone should refinance immediately.

Every situation deserves a personalized review.

If you're considering refinancing, evaluate:

• Closing costs

• Monthly payment savings

• Break-even timeline

• Remaining time in the home

• Long-term financial goals

If you're buying a home, ask yourself:

• Can I comfortably afford the payment?

• Am I financially ready?

• Does this purchase support my long-term goals?

The right decision is rarely based on fear of missing out—or fear of waiting too long.

It's based on thoughtful planning.

The Bottom Line

The last two years have taught us an important lesson.

Mortgage rates don't move in predictable, straight lines.

They improve.

They reverse.

They react to inflation, employment, investor confidence, global events, and countless economic forces that none of us can control.

If waiting still makes sense after reviewing your financial numbers, then waiting can absolutely be part of a smart strategy.

But if today's financing options already improve your situation, delaying for a "perfect" mortgage rate could end up costing more than it saves.

Rather than trying to predict where rates will be next month, focus on making the best decision with the information available today.

That's a strategy you can actually control.

Frequently Asked Questions

Will mortgage rates go back down?

Most economists expect mortgage rates to improve over time, but the timing and pace are impossible to predict. History shows they often move gradually and can reverse quickly due to changes in inflation, economic data, or investor expectations.

Does the Federal Reserve control mortgage rates?

Not directly. The Federal Reserve primarily influences short-term interest rates. Mortgage rates are more closely tied to the bond market, inflation expectations, and the 10-Year Treasury yield.

Should I wait to buy a house until rates fall?

That depends on your financial situation. If buying now fits your budget and supports your long-term goals, waiting solely for lower rates may not be the best strategy. Every decision should be based on your personal finances rather than trying to predict the market.

Is refinancing worth it with today's rates?

It can be. A refinance should be evaluated based on your closing costs, monthly savings, break-even period, how long you plan to stay in the home, and your overall financial objectives.

Why do mortgage rates change every day?

Mortgage rates respond to changing market conditions, including bond yields, inflation data, employment reports, investor confidence, and global economic events. These factors can cause rates to move daily.

Let's Build a Strategy That Fits Your Goals

Whether you're considering buying your first home, refinancing your current mortgage, or exploring ways to improve your monthly cash flow, every decision should begin with a clear understanding of your numbers—not market speculation.

I'd love to help you evaluate your options and create a strategy that supports your financial goals.

Schedule a free 15-minute consultation, and we'll review your questions, discuss your goals, and determine the next best step based on your unique situation.

I'm Amber Jones, Certified Mortgage Advisor, and my mission is to educate, empower, and help you confidently navigate every stage of your homeownership journey.