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Economic Times
11-08-2025
- Business
- Economic Times
2026 mortgage rates set to change: Will Warren Buffett's Berkshire Hathaway prediction give the housing market the relief it needs?
Synopsis Mortgage rates are projected to fall to around 6% by 2026, giving hope to homebuyers after years of high borrowing costs. Experts, including Fannie Mae and NAHB, see easing inflation, slower economic growth, and rising housing inventory as key drivers behind the expected drop. While rates could gradually decline over the next two years, current averages remain near 6.63% for 30-year loans. Mortgage rates in the U.S. are finally showing signs of relief, with experts predicting they could drop to around 6% by 2026. Mortgage rates in the United States are expected to slowly decline over the next two years, with leading economic forecasts pointing to a return to the 6% range by 2026. The projections come amid signs of easing inflation, shifting Federal Reserve policy, and a changing housing market landscape — factors that could reshape affordability for millions of buyers. According to Fannie Mae, the average 30-year fixed mortgage rate is projected to hit 6% by the third quarter of 2026, in line with expectations of a softer economy and more moderate inflation. The National Association of Home Builders (NAHB) is slightly more optimistic, predicting rates could dip below the 6% mark — averaging around 5.98% by the end of 2026. However, not all forecasts are quite as bullish. Berkshire Hathaway analysts expect rates to remain elevated in the near term, noting they could inch toward 6% in 2025 but likely stay between 6.5% and 7% through the end of 2025. Several economic indicators are working in tandem to push rates lower. The biggest factor is inflation, which has cooled significantly compared to its 2022 highs. Should that trend continue, the Federal Reserve could begin cutting its benchmark interest rates, which would indirectly ease mortgage borrowing costs. Economic growth is also slowing. Some analysts warn of a possible mild recession in late 2025 or early 2026, which historically has led to rate cuts. Additionally, the housing market itself is undergoing a shift. As more Baby Boomers downsize and list properties, housing inventory could rise, reducing competitive bidding and easing upward pressure on home prices and rates. As of early August 2025, the average 30-year fixed mortgage rate sits around 6.63%, while the 15-year fixed rate averages 5.75%, according to The Mortgage Reports . These figures are down from last year's peak but still above pre-pandemic lows, when rates dipped below 3%. While the idea of securing a mortgage at 6% or lower is appealing, experts caution against assuming lower rates will necessarily make buying easier. Home prices remain on an upward trajectory, driven by strong demand and limited long-term housing supply. 'If you're financially prepared and find a home that meets your needs, buying now could still be the right decision,' financial analysts told Investopedia . 'Future refinancing could lower your payments once rates come down, but waiting too long could mean paying more for the home itself.' For now, mortgage rates are trending lower — but the path to 6% will likely be gradual, not sudden. Economic conditions, inflation data, and Federal Reserve policy decisions over the next 18 months will be key to determining just how low rates can go. Buyers weighing their options may face a familiar dilemma: wait for potentially cheaper borrowing costs or act before rising home values outweigh any interest rate savings. Either way, experts agree the coming years could offer a more favorable lending environment compared to the highs of 2023 and 2024. Q1: What are the predicted mortgage rates for 2026? Experts, including Warren Buffett's Berkshire Hathaway, forecast mortgage rates to trend around 6% in 2026, signaling a potential decline from current higher levels. Q2: Why are mortgage rates expected to drop to 6% by 2026? Factors such as easing inflation, potential Federal Reserve rate cuts, and a cooling economy are likely to contribute to mortgage rates gradually falling back to around 6%. Q3: How will these mortgage rate changes impact the housing market? Lower mortgage rates generally improve affordability, encouraging more buyers to enter the market, which could stabilize or boost home sales after recent slowdowns. Q4: Should I wait until mortgage rates drop before buying a home? While waiting for rates to hit 6% might seem appealing, rising home prices and inventory changes mean buyers should weigh their financial readiness and local market conditions carefully. Q5: What role does Berkshire Hathaway's prediction play in mortgage trends? As a major investor and real estate player, Berkshire Hathaway's forecasts often reflect broader economic expectations and can influence market sentiment about future mortgage rates.
Time of India
11-08-2025
- Business
- Time of India
2026 mortgage rates set to change: Will Warren Buffett's Berkshire Hathaway prediction give the housing market the relief it needs?
Mortgage rates in the United States are expected to slowly decline over the next two years, with leading economic forecasts pointing to a return to the 6% range by 2026. The projections come amid signs of easing inflation, shifting Federal Reserve policy, and a changing housing market landscape — factors that could reshape affordability for millions of buyers. How low are mortgage rates expected to go by 2026? According to Fannie Mae , the average 30-year fixed mortgage rate is projected to hit 6% by the third quarter of 2026 , in line with expectations of a softer economy and more moderate inflation. The National Association of Home Builders (NAHB) is slightly more optimistic, predicting rates could dip below the 6% mark — averaging around 5.98% by the end of 2026. Finance Value and Valuation Masterclass Batch-1 By CA Himanshu Jain View Program Finance Value and Valuation Masterclass - Batch 2 By CA Himanshu Jain View Program Finance Value and Valuation Masterclass - Batch 3 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals By Vaibhav Sisinity View Program Finance Value and Valuation Masterclass - Batch 4 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program However, not all forecasts are quite as bullish. Berkshire Hathaway analysts expect rates to remain elevated in the near term, noting they could inch toward 6% in 2025 but likely stay between 6.5% and 7% through the end of 2025 . by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Secure Your Child's Future with Strong English Fluency Planet Spark Learn More Undo What's driving the projected decline in rates? Several economic indicators are working in tandem to push rates lower. The biggest factor is inflation, which has cooled significantly compared to its 2022 highs. Should that trend continue, the Federal Reserve could begin cutting its benchmark interest rates, which would indirectly ease mortgage borrowing costs. Economic growth is also slowing. Some analysts warn of a possible mild recession in late 2025 or early 2026, which historically has led to rate cuts. Additionally, the housing market itself is undergoing a shift. As more Baby Boomers downsize and list properties, housing inventory could rise, reducing competitive bidding and easing upward pressure on home prices and rates. Live Events Where do rates stand right now? As of early August 2025, the average 30-year fixed mortgage rate sits around 6.63% , while the 15-year fixed rate averages 5.75% , according to The Mortgage Reports . These figures are down from last year's peak but still above pre-pandemic lows, when rates dipped below 3%. Should buyers wait for rates to drop? While the idea of securing a mortgage at 6% or lower is appealing, experts caution against assuming lower rates will necessarily make buying easier. Home prices remain on an upward trajectory, driven by strong demand and limited long-term housing supply. 'If you're financially prepared and find a home that meets your needs, buying now could still be the right decision,' financial analysts told Investopedia . 'Future refinancing could lower your payments once rates come down, but waiting too long could mean paying more for the home itself.' For now, mortgage rates are trending lower — but the path to 6% will likely be gradual, not sudden. Economic conditions, inflation data, and Federal Reserve policy decisions over the next 18 months will be key to determining just how low rates can go. Buyers weighing their options may face a familiar dilemma: wait for potentially cheaper borrowing costs or act before rising home values outweigh any interest rate savings. Either way, experts agree the coming years could offer a more favorable lending environment compared to the highs of 2023 and 2024. FAQs: Q1: What are the predicted mortgage rates for 2026? Experts, including Warren Buffett's Berkshire Hathaway, forecast mortgage rates to trend around 6% in 2026, signaling a potential decline from current higher levels. Q2: Why are mortgage rates expected to drop to 6% by 2026? Factors such as easing inflation, potential Federal Reserve rate cuts, and a cooling economy are likely to contribute to mortgage rates gradually falling back to around 6%. Q3: How will these mortgage rate changes impact the housing market? Lower mortgage rates generally improve affordability, encouraging more buyers to enter the market, which could stabilize or boost home sales after recent slowdowns. Q4: Should I wait until mortgage rates drop before buying a home? While waiting for rates to hit 6% might seem appealing, rising home prices and inventory changes mean buyers should weigh their financial readiness and local market conditions carefully. Q5: What role does Berkshire Hathaway's prediction play in mortgage trends? As a major investor and real estate player, Berkshire Hathaway's forecasts often reflect broader economic expectations and can influence market sentiment about future mortgage rates.
Yahoo
14-04-2025
- Business
- Yahoo
Can Homeownership Lower Your Taxes? Here Are 6 Expert Tips To Help You
What tax benefits does owning a home offer? There might be some that homeowners are missing out on. Learn More: Read Next: Here are some of the ones experts recommended looking into before homeowners file their taxes. Greg Clement, CEO and founder of Freedomology, an app designed to help people achieve financial freedom, pointed out that the mortgage interest deduction is probably the most popular way homeowners benefit when it comes to taxes. With it, homeowners can deduct home mortgage interest on the first $750,000 ($375,000 if married filing separately) of debt. Check Out: Clement highlighted property taxes as another expense that can be written off. Just keep in mind that the deduction for state and local taxes, including real estate taxes, is limited to $10,000. For married couples filing separately, the limit is $5,000. For those who work from home, Clement pointed out that there is a deduction for home offices for the right type of employee. 'If you work from home you might qualify for a home office deduction if you are self-employed. W-2 employees are out of luck,' he said. For those who have the means, Clement recommended renting out part of a home or the entire place to be eligible for certain tax benefits. 'If you're renting out part of your home, like an Airbnb or a basement apartment, you can deduct a percentage of your utilities and maintenance. That's free money most people never take advantage of,' he said. 'Some states offer property tax exemptions for seniors, so it's always worth looking into,' Clement said. This usually applies to homeowners 65 and older, though some states give tax breaks to those as young as 61. In states like New Hampshire, seniors benefit from increased tax exemption as they get older, according to The Mortgage Reports. However, some of these exemptions might not be available if a senior's income is more than a certain amount. Those who make sustainable changes to their homes may be eligible for energy-efficient property credits. 'If taxpayers are in a position to put solar panels on their home or make other energy-efficient improvements, then that can be a great method of reducing your energy bills and claiming a significant tax credit,' said Adam Brewer, an attorney at AB Tax Law. Overall, there are many tax deductions homeowners may be able to qualify for. Clement cautioned that not everything is tax deductible, but it's still important to keep track of upgrade costs. 'Some homeowners think everything they spend on their home is deductible, but that's far from the truth. You can't deduct a new hot tub or the pool you just put in, no matter how nice they are. However, if you're making major upgrades, keep track of them anyway. They could lower your capital gains tax bill when you sell the house,' he said. More From GoBankingRates6 Reasons Your Tax Refund Will Be Higher in 2025 7 Tax Loopholes the Rich Use To Pay Less and Build More Wealth 25 Places To Buy a Home If You Want It To Gain Value This article originally appeared on Can Homeownership Lower Your Taxes? Here Are 6 Expert Tips To Help You
