Updated 04/11/2026
Interest rates are back above 6% with the best 30 year fixed rates being around 6.375%. This is due to the Iran war, oil prices and the Fed chairman, Jerome Powell’s opposition to lowering rates. More than likely this interest rate bump will be short-lived once the straight of Hormuz is shown to be safely reopened and a new Fed chairman takes over later this spring. Maybe I’m overly optimistic but I think rates will drop down to the mid-fives or better later in the year. Hopefully that will be a trend that follows through next year, bringing rates to the low 5%’s or maybe even the high 4%’s over the next 18 months.
If I were buying a home right now I would not pay points for a lower interest rate but buy now and wait till rates are down and then refinance. I would even seriously consider an adjustable-rate for its initial discount and as I said refinance when rates are down. If you wait till interest rates are down, then equally home prices will be up. Hopefully I’m right. The following link is not necessarily the absolute best rates, so shop around or call me and I give you a few referrals of lenders who could beat these average rates. Click Here To See Current Interest Rates
Why do I think rates will come down .5% to 1.5% over the next two years? The Federal Reserve has three guidelines they use to adjust interest rates, recessions, inflation and GDP to debt ratio.
First, we are currently in a mild recession and although numerous large manufacturers have committed to bringing manufacturing back to the United States, it will likely take about two years before we realize the significant boom to the economy. Second, although inflation through 2024 was as high as 8%, it is currently averaging around 3%. Third, our gross domestic product or GDP is around 31 trillion and our national debt is a around 39 trillion. That ratio of 1 to 1.26 needs to be lower than 1 to 1. Though paying down our debt by 8 trillion in a short period of time is near impossible, raising our GDP by 8 trillion over the next few years is actually likely to happen with the additional manufacturing coming back to the United States. Any movement bringing those numbers closer to a more safe 1 to 1 or at least lower, will give the feds added incentive to lower rates. And don’t forget the new Fed chairman will be picked based on his willingness to work with the current administration and bolster the American economy.
Click here to See Government Borrowing In Real Time. You won’t believe your eyes!
If you have any questions, feel free to call me. Alex Schauffert 707 332 8301
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