Anticipated Mortgage Rates Scenarios in 2025 by Berkshire Hathaway, as Forecasted by Warren Buffett
Lower Mortgage Rates on the Horizon, According to Experts
Mortgage rates are expected to decline to around 6% in 2026, offering some relief to homebuyers after several years of high borrowing costs. This projection comes from Warren Buffett’s Berkshire Hathaway and other housing market experts.
The anticipated easing of mortgage rates is primarily due to easing inflation, cautious Federal Reserve policies, and a softening housing market. Berkshire Hathaway’s HomeServices division predicts that while home prices will rise more slowly, slightly lower mortgage rates might encourage more buyers to enter the market, increasing inventory and exerting downward pressure on prices.
Experts from Fannie Mae and the National Association of Home Builders also forecast mortgage rates dipping below 6% by late 2026. However, a sudden drop to very low levels, such as around 4%, is not expected.
The Federal Reserve is expected to start cutting rates towards the end of 2025 and more cuts in 2026. If the Federal Reserve cuts rates gradually, mortgage rates could slowly decline, according to Hannah Jones, a senior economic research analyst at Realtor.com.
As of August 7, 2025, the average rate on a 30-year fixed-rate mortgage was 6.63%. Mortgage Bankers Association forecasts average rates of 6.7% in Q3 2025, easing slightly to 6.6% by the end of the year and 6.5% in Q1 2026.
In the current market, home inventory has increased to a 9.8-month supply, with 37% of builders cutting prices. The pace of sales slowed down in July, taking 58 days to sell a home, seven days longer than the previous year, and prices were reduced for 20.6% of listings.
The National Association of Home Builders (NAHB) reported a 13.7% drop in new home sales in May based on signed purchase contracts due to persistent interest rates and economic uncertainty.
Homebuyers should plan their purchases around gradual rate relief rather than waiting for a sharp drop, as the shift will most likely be modest instead of dramatic. Shopping around for lenders, improving credit score, saving for a larger down payment, considering different loan types, and talking to a financial advisor are recommended actions for homebuyers.
For investors looking to build steady cash flow and protect their wealth from borrowing cost volatility, Norada offers turnkey rental properties in resilient markets.
It's worth noting that mortgage interest rates have been slowly decreasing lately, even without any help from the Federal Reserve. This trend could continue as the housing market gradually stabilizes, with rates easing and inventory increasing.
- Experts predict that mortgage rates will decline to around 6% in 2026, making investment in real-estate more attractive.
- The declining mortgage rates, due to easing inflation and a softening housing market, might encourage more rental property investments, according to Berkshire Hathaway’s HomeServices division.
- In the current real-estate news, homebuyers and investors should take advantage of the gradual rate relief by exploring various investment opportunities, including turnkey rental properties in resilient markets, such as those offered by Norada.
- For those interested in investing in real-estate and building steady cash flow, it's essential to consider factors like improving credit, saving for large down payments, and shopping around for lenders, while also consulting a financial advisor.
- As the market continues to stabilize, investors can expect a longer-term trend of easing mortgage rates, which favor both homebuyers and real-estate investors looking to secure favorable financing for their purchasing decisions.
