One of the most pressing questions for homebuyers in the United States is when mortgage rates will go down.
The second is when home prices will decrease.
Who can blame them? The 30-year fixed mortgage rate has been over 6.5% for six consecutive weeks, according to Freddie Mac data. Multiple sources put the median home sales price at well over $400,000, depending on the exact timeframe.
Those are rough numbers for people trying to afford a house, especially first-time homebuyers.
The Mortgage Bankers Association (MBA), a trade group representing the U.S. real estate finance industry, has released the August MBA Mortgage Finance Forecast. The MBA’s monthly reports provide outlooks on various aspects of the housing market — including mortgage interest rates and home sales prices.
The August forecast has a mix of good and bad news for homebuyers.
Don’t expect mortgage rates to provide much relief through 2027. Home prices may offer some relief, particularly for existing homes, but the decline is expected to be modest.
Mortgage rates expected to stay near 6.7%
Along with the Mortgage Bankers Association, the government-sponsored enterprise (GSE) Fannie Mae is the other big name in housing market forecasts. Fannie Mae released its August Housing Forecast on Aug. 13. Afterward, I wrote about the drastic spike in mortgage rate predictions compared to previous months.
Fannie Mae now predicts the 30-year fixed mortgage rate to average 6.7% in Q3 and 6.8% in Q4 2026. Next, it predicted a 6.8% rate in the first half of 2027 and 6.7% in the second half.
The MBA published its August forecast on Aug. 20. As with Fannie Mae, the mortgage rate projections for 2026 and 2027 had changed significantly from the previous month.
In the July MBA Mortgage Finance Forecast, the trade group’s 30-year mortgage rate outlook was 6.5% for the second half of 2026 and all of 2027.
Related: Zillow predicts major mortgage rate, housing market change
But in August, the MBA shifted its mortgage interest rate prediction to 6.6% in Q3 2026, then to 6.7% in Q4 2026 and for all of 2027.
Quarter-by-quarter projections from Fannie Mae and the MBA differ a little. But both organizations’ August reports put the average 30-year mortgage rate at 6.7% for at least half of the next six quarters.
Of course, these predictions aren’t set in stone. Mortgage rates could decrease when the war between the U.S. and Iran ends, or when inflation cools significantly. The current geopolitical and economic uncertainties are two major reasons mortgage rates are staying well above 6.5%.
The MBA predicts the 30-year mortgage rate will be 6.7% through the end of 2027.sommart / Getty Images
The MBA foresees lower existing-home prices
The Mortgage Bankers Association (MBA) monthly forecasts include a category you won’t find in Fannie Mae’s predictions: home prices.
The MBA breaks up its home sales price predictions into two categories. The first is existing-home sales, which represents homes that have been previously owned and are listed for sale. The second is new homes, or new-construction houses that haven’t been lived in before.
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In Q2 2026, the median sales price of an existing home was $430,500, according to the MBA.
The organization forecasts existing-home prices to fall for the rest of 2026 and into 2027. The exceptions are predicted increases in Q3 and Q4 2027. Because I’ve reported on the housing market for years, my read is that the increase could reflect the typical seasonal strength of the homebuying market, when buyer competition can drive up prices.
Overall, the MBA puts the median existing-home price at $410,400 to close 2026, or a 4.7% decline from Q2 prices. It also expects the median price to be $404,600 in Q4 2027, or a 6% decrease from Q2 2026.
So there’s potential for existing-home prices to fall — but mortgage rates could stay elevated. These two forces could partially offset each other.
New-home prices are a different story
The MBA put the median price of newly built homes at $408,700 in Q2 2026. The organization expects the median price to hold steady in Q3, then drop to $400,300 in Q4.
But its 2027 projections are a little volatile.
The trade group foresees median new home sales prices jumping in Q1 and Q2, then inching down in Q3 and Q4. Overall, the MBA says new home prices will end 2027 at $411,200, higher than in 2026.
The MBA also predicts that new housing starts will decrease for most of 2027. Less inventory typically leads to more competition and higher prices. And sales prices probably wind down in Q4 because fewer people tend to buy homes at the end of the year.
Whether you want to buy a new or existing home, the MBA’s forecast sends a clear message: Home prices may give buyers some relief, but mortgage rates aren’t expected to do the same. So even if houses become somewhat cheaper, financing one may remain expensive.
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