Mortgage rates were largely unchanged on Oct. 22, 2026, but Zillow chief economist Mischa Fisher sees a significant possibility of a further rise, putting the chance of rates reaching 8 percent at roughly 25-30 percent. Zillow’s forecast nevertheless points to modest easing rather than another sustained increase. That leaves prospective homebuyers weighing the possibility of cheaper financing against rising home values and what Zillow’s research suggests may be limited monthly savings from postponing a purchase.

The latest mortgage application figures show that applications fell even as borrowing costs eased slightly. Applications declined 5.3% in the week ending Oct. 16 from the preceding week, according to the Mortgage Bankers Association. Joel Kan, the association’s vice president and deputy chief economist, noted in a news release that the fall came despite a slight reduction in mortgage rates. The figures provide a subdued backdrop to the debate over borrowing costs in 2027.

Fisher discussed the outlook at Zillow Unlock 2026 on the morning that a disappointing consumer price index report sent yields higher. His explanation focused on the way elevated diesel and energy prices feed through to the prices of everyday goods, helping to sustain inflation. He described inflation as behaving like a snowball. For housing, the concern is not simply the direction of the latest inflation report, but that the current rate cycle is bearing down on an already weak market.

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Even so, Fisher does not see further increases in Federal Reserve rates as necessarily ruling out some relief for mortgage borrowers. He expects additional Fed rate hikes, while also judging that much of the increase in the 10-year yield has already occurred. Zillow’s forecast calls for mortgage rates to decline slightly over the next 12 months. His assessment therefore combines continued inflation pressure and further policy tightening with a comparatively restrained outlook for the additional movement in longer-term yields.

The possibility of rates reaching 8 percent remains a risk rather than Zillow’s central projection. Fisher’s estimate of roughly 25-30 percent gives that outcome weight without making it the most likely path in his assessment. His sales outlook is also conditional: if mortgage rates remain at their current level, he expects 2027 sales to be broadly unchanged or somewhat lower. That distinction matters because a forecast of slightly easing rates is not, by itself, a forecast of a strong housing recovery.

For households considering whether to wait, Fisher pointed to Zillow research suggesting that a typical buyer saves about $26 a month by delaying a purchase for a year. That finding challenges the assumption that waiting for a more favourable mortgage market will necessarily deliver substantial savings. It is presented as a result for a typical buyer, rather than a calculation for every prospective purchaser. Fisher’s broader argument is that the expected financial benefit of postponement may be smaller than buyers anticipate.

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Rising home values are another consideration for buyers weighing a delay. Fisher noted that values continue to increase, meaning the mortgage rate is not the only consideration facing someone who delays buying. He also highlighted the ability to lock a 30-year fixed mortgage rate for the duration of the loan. In his view, buyers should weigh those features alongside their own plans rather than allowing expectations about future borrowing costs alone to determine when they move ahead with a home purchase.

Fisher also pointed to a more favourable negotiating environment for buyers, who have more homes to choose from and greater bargaining scope than they have had in years. Those conditions offer buyers advantages even as overall mortgage applications have declined. They do not eliminate uncertainty over rates, but they broaden the decision beyond a forecast of interest costs. His assessment places the available choice of homes and the scope for negotiation alongside the potential savings from waiting.

How a home is marketed can also affect the outcome, according to separate Zillow research Fisher discussed. The company found that properties sold off market tend to fetch less than their estimated value. Fisher attributed that result to narrower exposure and a less effective process of connecting homes with suitable buyers, leaving sellers at a disadvantage. Although that research addresses the sales process rather than mortgage pricing, it adds another consideration for households trying to assess a transaction in a weak housing market.

The outlook includes uncertainty over inflation pressures and whether mortgage rates follow Zillow’s projected modest decline. The application data show a weekly decline despite a slight rate reduction, while Fisher’s conditional sales forecast remains cautious. For buyers, the competing considerations are clear: waiting could bring lower financing costs, but home values are still rising and Zillow estimates only limited typical savings from a year’s delay. The risk of 8 percent rates remains an alternative to the central forecast, not its expected outcome.