Neighbors Bank, a mortgage lender focused on first-time and underserved homebuyers, set out to understand what's keeping potential homebuyers from making a move. The lender surveyed 1,000 U.S. adults who identify as potential homebuyers about how long they've been waiting, the mortgage rate they're holding out for, and how accurately they read the market.
The findings point to good news for people who have been waiting to buy. Many potential homebuyers believe mortgage rates are higher than they are, meaning homeownership may be closer than they assume. With an accurate picture of where rates stand and the loan options available, many could move forward sooner than they expect.
Key Takeaways
Many potential homebuyers misjudge the market: only 35% correctly identified the average 30-year mortgage rate range at the time of the survey, and 45% thought rates were higher than they actually were.
72% of potential homebuyers have delayed their home search, waiting an average of 13 months for mortgage rates to improve.
41% of waiting homebuyers already regret not buying before rates or prices climbed further, and 17% say they'd have bought sooner if they could redo the last year.
The average homebuyer waiting for rates to drop is holding out for about a 5% mortgage rate, and 34% would buy immediately if rates dropped to their target.
28% are actively searching and ready to buy now.
The Rate Homebuyers Are Waiting For
For most would-be homebuyers, the decision to wait to purchase a home comes down to one number: the mortgage rate they're hoping to see.
Many potential homebuyers (72%) are holding off buying for now, and they've been waiting an average of 13 months for rates to come down. The average mortgage interest rate they are holding out for is around 5%. Millennials have waited the longest at 14 months, compared to 8 months for Gen Z. The other 28% of homebuyers are actively searching and ready to buy.
When asked what the current 30-year mortgage rate was at the time of the survey, only 35% of potential homebuyers answered correctly, and 45% guessed too high. Before writing off this year, homebuyers should check where rates actually stand and what loan options are on the table, instead of holding out for a number that may be out of step with the market. Owning a home could be within closer reach than it seems.
For homebuyers who don't want to wait on the market, there are ways to bring the rate down now. Buying discount points at closing, for example, lowers the interest rate for the life of the loan and can reduce monthly payments. With this option, a homebuyer can work with current rates rather than wait for a target that may not arrive for years.
What Else Is Holding Homebuyers Back, and Why It's Solvable
The longer homebuyers hold out, the more many start to second-guess the decision to wait, and a fair number already regret how long they've waited.
A lower monthly payment is the top reason homebuyers give for still waiting to buy, cited by 34%. Others said they can't afford a home right now (25%), are still saving for a down payment (18%), feel unsure about the economy (12%), or expect home prices to drop (10%).
Rent is another piece of the puzzle. Just 15% said rising rent hasn't changed their plans, while nearly half (49%) said it's made saving for a home harder and pushed their timeline back. On top of that, 67% believe home prices in their area have climbed since they started looking.
About 1 in 6 (17%) said that if they could go back to the start of 2025, they'd have bought rather than waited. Another 40% wish they'd bought during the lower rates of the pandemic era. The thread running through all of this is timing, one of the few things a homebuyer can't predict. The good news is that saving for a down payment and affording a home right now are worries often more solvable than they seem.
A homebuyer who feels priced out may qualify for more than they expect. Down payment assistance can cover much of the upfront cost, with forgivable, deferred, and low-interest plans that reduce what a homebuyer needs to save. There are also low- and 0% down payment options built for tighter budgets. Rather than waiting for a perfect moment that only looks obvious in hindsight, homebuyers can put these options to work today.
What Five Years of Rates Reveal About Timing
A look at the past five years shows how much the market has shifted, and why a different plan often beats waiting for a precise mortgage rate to return.
According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed mortgage rate dropped to 2.65% in January 2021, the lowest level during the period covered by this study. From there, it climbed sharply through 2022 as the Federal Reserve raised rates to fight inflation, nearly tripling to a peak of 7.79% by October 2023.
Rates have eased since then. They dipped as low as 5.98% in late February 2026 before settling into the 6.4% to 6.5% range by mid-2026, landing at 6.49% as of July 9, 2026. That's meaningfully below the 2023 high, even if it's still above the roughly 5% many homebuyers say they're waiting for.
What the Findings Mean for Homebuyers
Waiting for a specific rate can feel like the safe choice, but the survey suggests homeownership is often more attainable than it appears. The rate many homebuyers are holding out for hasn't been the market average in years, and the findings point to an opportunity: buyers who understand where rates actually stand may be positioned to move sooner than they thought. The most useful move is usually to work with the market as it is, and that's where the right lender makes the difference.
At Neighbors Bank, helping first-time and underserved homebuyers find a path forward is our mission, whether that's lowering a rate with discount points, covering upfront costs through down payment assistance, or opening the door with a low-down-payment loan built for tighter budgets. The sooner homebuyers explore their options, the sooner they can act on what's within reach.
Methodology
Neighbors Bank surveyed 1,000 U.S. adults ages 18 and older who identified as potential homebuyers, using SurveyMonkey in July 2026. Of these, 977 respondents were currently planning to buy a home, either within the next 12 months or in the next couple of years, and proceeded through the full survey. Respondents were 57% women and 42% men, and spanned Gen Z (20%), millennials (56%), and Gen X (20%) generations; baby boomers (4%) and non-binary or other gender identities (2%) are included in overall figures but excluded from generational and gender breakdowns due to small sample size. Average figures for open-ended numeric questions (months spent waiting, target mortgage rate, individual income) use an IQR-adjusted mean to control for outlier responses. Percentages that do not total 100% are due to rounding.
Source for Historical Mortgage Rates
Mortgage rate figures were sourced from Freddie Mac's Primary Mortgage Market Survey (PMMS), which reports weekly average 30-year fixed mortgage rates based on conforming, conventional purchase loan applications. Figures shown reflect the period from January 2020 to July 9, 2026, the date on which the weekly average of the 30-year fixed mortgage rate used in the survey was sourced. PMMS reports the national weekly average for the 30-year fixed-rate mortgage based on purchase-loan applications submitted to Freddie Mac by lenders across the country, including credit unions, commercial banks, and mortgage companies. Only conventional, single-family loans that fall within the conforming limits set by the FHFA are counted. Mortgage rates are historical PMMS benchmark rates, not rates or APRs offered by Neighbors Bank.
Disclaimer: Mortgage rates vary based on the loan program, borrower qualifications, credit profile, property, down payment, points, market conditions, and other factors. The rates shown are not an offer or guarantee that any borrower will receive a particular rate.
About Neighbors Bank
Neighbors Bank is a home loan lender dedicated to helping everyday Americans on the path to homeownership. Specializing in mortgage products designed for first-time homebuyers, Neighbors Bank combines competitive rates with a clear process so you can focus on finding the right home and not get lost in the paperwork.
Fair Use Statement
The findings and graphics in this report are available for noncommercial reuse. If you'd like to share this data, please attribute Neighbors Bank and link back to this page.
