Kevin Hassett says mortgage rates will fall 'very quickly over the next few months.' They just hit 7.28%. Should you wait to buy?

The 64-year-old noted that the economy is “booming” and people are buying houses and cars.

“Housing starts and permits are way up,” Hassett said, adding that interest rates “have to come down, and as we get inflation down to 1% or 2%, that’s where mortgages will head.”

Currently, US 30-year mortgage rates stand at 7.28% according to Freddie Mac, up from 7.03% last week and up from 6.34% at the same period in 2025.

The White House prediction may come true (eventually)

Mortgage analysts say multiple barriers could slow mortgage rate reductions in the near future.

One of those analysts is Dell Jeanty, a Northern Virginia Realtor and founder of Dell Residential Group.

“The Personal Consumption Expenditures (PCE) price index, specifically the core PCE, which excludes food and energy, would have to fall in the ballpark of 2.1% to 2.3%. That would be an impossible downward migration in a short period of time,” Jeanty told Moneywise.

That index stands at 3.0% as of August, pretty much where it was (at 2.0%) a year ago at this time. Jeanty said it’s “very unlikely” for those pressures to do a 180-degree turn.

“As long as oil and energy prices remain elevated, those pressures will persist because of inflation fears,” he said. “Ascending Treasury yields and mortgage rates are largely driven by persistent inflation fears.”

Other market gurus agree, noting that long-entrenched geopolitical factors have historically pushed rates up and are escalating.

“We expect mortgage rates to remain elevated and potentially move higher in the near term, particularly as markets continue to assess geopolitical risks, the rising federal deficit, higher oil prices, tariffs, and their potential impact on inflation,” Pavan Agarwal, president and CEO at Sun West Mortgage Company, told Moneywise. “The disruption to oil supplies through the Red Sea has put additional focus on energy prices and inflation, with oil now trading above $100 per barrel.”

While the market largely anticipates a 25-basis-point increase by the Fed, Agarwal’s team believes a single rate hike may not be enough to offset the broader forces currently pushing Treasury yields higher.

“As inflationary pressures eventually moderate and the Fed is able to regain greater control of inflation, we believe rates could begin to normalize in 2027 and move closer to the levels that prevailed before the war and the recent inflationary pressures,” he said.

Is it still a good time to buy a home?

With mortgage rates hovering above 7%, it’s not an ideal time to buy a property. Yet in some cases, it makes good sense.

“Yes, those who can afford to purchase a home at today’s mortgage rate should feel comfortable buying, because they can always refinance when rates are lower,” Jeanty said. “They can buy a home at a lower price because home prices are inversely related to mortgage rates.”

The match likely backs that sentiment up, at least in some cases

Take someone buying a $400,000 or $500,000 home. Going in, that buyer should know the difference that a decline from roughly 7.3% to 6.5%, 6% or 5.5% will make to the monthly payment and lifetime borrowing cost, and weigh those potential savings against the risk that home prices rise while they wait.

“At the $400,000 or $500,000 home, a drop in mortgage rates from 7.3% to 5.5% will lower monthly principal and interest payments by $377 to $589 and slash lifetime borrowing costs by $135,685 to $212,007,” Jeanty said.

While any buyer can wait for rates to come down, waiting carries a hidden risk.

“If buyers are on the fence and stampede back into the market, that could drive home prices up by 5% to 10%; the higher purchase price can neutralize a buyer’s monthly savings,” Jeanty added.

Don’t make home buying decisions on mortgage rates, anyway

While home borrowing rates are rising, making a “no” call on a new home over rates alone is not advisable.

“We don’t believe the decision to purchase a home should be driven solely by the expectation that mortgage rates will decline,” Agarwal said, adding that taking a longer view should help buyers make a holistic decision that covers several key homebuying considerations.

“A home is a long-term investment, and the more important considerations are whether the homebuyer can comfortably qualify for and afford the home today.”