Broker believes while rates aren’t about to plunge, he hopes we’ll reach the fives in 2026
A consistent narrative being blasted in the media throughout 2025 is that interest rates need to be cut. The White House has been putting constant pressure on the Federal Reserve to slash rates.
Now, Stephan Miran, the newest member of the Fed, is saying that rates are 1.25% higher than they should be.
And while it is well-documented that Fed rate cuts don’t directly impact mortgage rates, the talk of drastic rate cuts is affecting potential homebuyers and those looking to refinance existing mortgages, according to one broker.
Amir Nurani (pictured top), broker-owner at Left Coast Leaders in California, said one of the biggest challenges in the current market is that buyers are hearing all the talk about slashing rates, and they’ve decided to hold steady, waiting for this drastic decline.
“I think one of the main issues that I think is super relevant is that you have homebuyers right now waiting for this magical rate drop,” Nurani told Mortgage Professional America. “Because you have a White House that's pretty outspoken about the fact that they want lower rates, which I agree with. I think we should have lower rates, but you also have a Fed that is going to be very hesitant in terms of how fast they're going to move down.”
Mid-5s by summer 2026?
The predictions for falling rates aren’t new for 2025. Consumers have been hearing about it for more than a year. Nurani is hopeful that the current slide of rates will continue into 2026, and maybe rates can reach the mid-5s if things go well.
“I think the average consumer has been assuming that substantially lower rates are just on the horizon,” Nurani said. “I think that's false. I don't think that we're going to go into this low-rate environment. I think we're going to hover in the 6s through the end of the year. I think when we get to next year, we may dabble into the 5s. But I think the best-case scenario is when we get to the summer of next year, we might be in the mid-5s, if we're lucky.”
The problem with constantly waiting for a rate drop that likely isn’t coming is that it costs new homeowners months, if not years, of equity they could be building up in their new home.
“You have a lot of homeowners that are kicking the can down the road,” Nurani said. “They’re missing out on equity gains because they think they're super confident about the fact that we're going to see lower rates here, really, really soon. Because that's what they hear on the media, and that's what they hear from political candidates and people in office.”
Nurani said the factor that those customers don’t understand is the dual mandate of the Federal Reserve. While a softening job market led to a September cut and could lead to more cuts this year, a spike in inflation could bring all of those cuts to a sudden halt.
“The Fed has a dual mandate,” he said. “They have to make sure that our labor market stays intact. They also have to make sure that they curb inflation. And you're already seeing inflation kick back up again, north of 3%. That tells you that the Fed is not going to sit here and make huge cuts to interest rates.”
Giving reassurance
While home prices have cooled in some markets, others, like California, continue to see housing shortages, which means prices will continue to rise. This also means that a homebuyer’s built-in equity will continue to increase.
“Properties are sitting a little bit longer, but you still have an inventory shortage, especially in California, but I mean all around the nation,” Nurani said. “So one of the things I try to explain to people is, so long as there's a housing shortage, you're going to see prices of homes increase. Because it's just supply and demand economics. And if the demand continually outweighs the supply, the price goes up.”
Kimber White returned as president of NAMB with a clear mission. He aimed to tackle housing affordability by urging changes to loan-level price adjustments and calling for practical government solutions to help first-time buyers.https://t.co/N117mGSX54
— Mortgage Professional America Magazine (@MPAMagazineUS) October 15, 2025
He said one thing that brokers can take solace in is that by the time a customer reaches out to you in the homebuying process, they’re already pretty sure they want to proceed. So he said it comes down to reassuring them that they’re making the right decision and helping them across the finish line.
“The point in time at which I have a conversation with somebody who's thinking about buying a house before they get pre-approved, they have already got themselves 90% of the way there in making that decision,” he said. “That's why they're on the phone with me, or why they got referred to me. They're already at that place where they're like, ‘Maybe I should buy a house.’
“They just need that reassurance, that final bit of help across that last mile, and the fact that they're not making the wrong decision. And the fact of the matter is that, if you can afford it, it's not going to be a wrong decision, especially not in the long term and on the macro.”
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