Predicting where mortgage rates are headed has become increasingly difficult recently. Case in point: The average 30-year fixed rate fell below 6% in late February for the first time since 2022, only to reverse course when the Iran conflict pushed Treasury yields higher — sending rates climbing back toward 6.5% by April. Rates then dipped below 6% again shortly after, before ticking back up. The whiplash has left would-be homebuyers struggling to plan their entrance. That volatility matters, though, because even slight rate differences can have a big impact on the cost of buying a home in this borrowing landscape.

For example, while the difference between a 6% and 5% mortgage rate may seem nominal on paper, the reality is that just a 1% difference ultimately translates to hundreds of dollars a month on the typical home purchase. Right now, though, the average 30-year fixed rate is just under 6.5%, and the Federal Reserve has been holding its benchmark rate at a range of 3.50% to 3.75% as inflation climbs again. The Fed is also widely expected to leave rates unchanged at its June meeting, adding another layer of uncertainty to an already murky outlook.

Still, if this year has demonstrated anything, it's that the rate environment can shift faster than most forecasters expect. So, what would it actually take for mortgage rates to fall from nearly 6.5% to 5% — and is that scenario even on the table right now? Here's what three experts say about whether, and when, that could happen.

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When could mortgage rates drop close to 5% again? 

The experts we spoke to generally don't see mortgage rates close to 5% happening in the near future, and according to some experts, any meaningful rate improvement that occurs will largely depend on how ongoing geopolitical conflicts shift. 

"I don't foresee the 30-year mortgage rate dropping close to 5% again in the foreseeable future," said Heather Long, chief economist at Navy Federal Credit Union. "If the war in Iran ends, there's a good chance mortgage rates could return to around 6%. But the longer the war goes on, the longer inflation lasts, and the government's defense costs rise, and that means bond yields stay higher and borrowing costs for homes and everything else remain elevated."

Melissa Cohn, regional vice president of William Raveis Mortgage, also views the geopolitical climate as one of the main factors impacting mortgage rates right now. 

"Only when the war in Iran is over can we set any sort of timeline," Cohn says. "The damage to mortgage rates has been significant due to the war."

Predicting when mortgage rates will fall back toward 5% starts with watching the 10-year Treasury yield, which mortgage rates closely track, according to JD Pisula, CEO of Accolade Advisory. Treasury yields have gone up in recent months as stubborn inflation reduces the likelihood of Fed rate cuts, Pisula notes, while geopolitical tensions add more long-term risk to rates.

"Barring a global recession requiring a reduction in interest rates and a reinstatement of quantitative easing by the Fed, it's hard to foresee a return of 5% mortgage rates within the next couple of years," Pisula says.

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What factors could push mortgage rates closer to 5%?

Despite the generally cautious outlook, experts acknowledge that 5% mortgage rates may be possible under the right conditions. 

"It is possible that rates will drop back to 5% or close to it, but a lot has to happen first," says Cohn. "The war in Iran has to end. Oil prices have to drop back by more than 40%, inflation needs to settle down below 2.5% and there needs to be softening in the economy so that bond yields drop back to the 3.50% range." 

That said, homebuyers who need to borrow money and homeowners who want to refinance should be aware that it could take months or even years for those conditions to play out, experts say. And, other changes would likely need to occur to precipitate a large rate decline, according to Long. 

"In order to get back to 5% mortgage rates, it will probably take a recession or for the AI boom to produce significantly stronger growth and lower inflation than the norm for the United States. A recession does not seem likely unless the war in Iran continues for a long time," Long says. 

Should you lock in a mortgage rate now?

While borrowers may be in for a long wait if they're hoping for average mortgage rates to drop closer to 5% again, you may not want to wait on the sidelines for that to happen. 

"It's always impossible to time the market," says Cohn. "If you are looking to buy, find the right home at the right price and then find the best rate available."

After all, buyers who make a move now can always refinance later if rates drop, and an adjustable-rate mortgage may offer a middle ground worth considering. 

"When considering that many homebuyers stay in their homes for less than 10 years, it is okay to consider adjustable-rate products like ARMs where they can get a lower rate today and have the option to refinance at some point in the next five to seven years," Pisula says.

The bottom line

While mortgage rates could fall closer to 5% in 2026, numerous factors would have to align for that to happen. And, waiting for the perfect rate may ultimately prove to be costly, as rates could rise just as easily as they could drop. So, for many homebuyers, it may not make sense to wait. It could make more sense to shop around instead. After all, rates vary by lender, so getting quotes from multiple lenders could help you land a better deal.