Dave Ramsey predicts major mortgage rate changes are coming soon

After several years of housing market stagnation, 2025 was expected to see significant market improvement. However, sticky inflation, trade wars, looming recession fears, and financial market volatility have kept mortgage rates higher than anticipated, stifling housing sales.

Mortgage rate forecasts have fluctuated with economic developments, inflation expectations, and treasury yield performance, but most now estimate that rates will land close to 6% by the end of 2026.

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Though it’s still unclear how the second half of the year will play out in terms of inflation and the Fed’s interest rate strategy, many are hopeful the housing market will improve from lower interest rates, increased inventory, and higher sales.

Buyer sentiment, however, has yet to pick up notably.

In an exclusive interview with TheStreet, Financial guru Dave Ramsey shares his surprising take on how the housing market will evolve over the next year, and what homebuyers should keep an eye out for.

Rising home prices, elevated mortgage rates, and limited supply have locked many potential buyers out of the housing market. However, Dave Ramsey notes that there may be change on the horizon soon.

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Dave Ramsey explains that lower mortgage rates are the key to booming home sales

Many homebuyers cite the lack of affordability due to home prices and rising mortgage rates as the main barrier to homeownership. 

The sharp uptick in mortgage rates in 2022 raised the cost of buying a home, dampening buyer sentiment. Most buyers are waiting for mortgage rates to drop to a lower, more palatable level before committing to buying a home.

Ramsey highlights that slightly lower mortgage rates may be enough of a catalyst to spark housing activity again.

“Well, there seems to be a pent-up demand,” he said. “People have been sitting on the sidelines, quote, waiting on prices to come down. They’re not going to because there’s not as much supply as there is demand.”

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Although mortgage rates could decrease soon, home prices are unlikely to fall significantly. The rate of home growth is decelerating, but JP Morgan expects home prices to rise 3% in 2025. 

Still, mortgage rates dropping even one percent to below 6% would be enough motivation for buyers to re-enter the market.

“I don’t think home prices are going to drop. If interest rates were to tick down one or two points, I think we’d see the thing catch on fire, Ramsey said. “I think some of the people that are sitting on the sidelines would jump back in the game.”

Dave Ramsey predicts improved buyer confidence and lower mortgage rates in the near future

Though homebuyer confidence is the key to unlocking the housing market gridlock, recent trade war tensions resulting from the Trump Administration’s reciprocal tariffs sent markets into a tailspin and rattled consumer confidence.

After several months of consistent mortgage rate declines, rates jumped back to 6.76% last week. Ramsey speculates that there is a 50/50 chance homebuyers react negatively to tariffs and rising prices.

Related: Dave Ramsey warns Americans to avoid major homebuying mistake

“From a consumer confidence perspective, they seem to be waiting on mortgage rates to drop,” he continued. “Maybe rates will be on the other side of the tariff panic, with consumers saying, ‘Oh, I don’t know whether I buy a house in the middle of all this.’ If that stuff calms down, then that’ll probably loosen up the housing market as well.”

As for mortgage rate projections, Ramsey is optimistic that they will eventually fall and bring relief to homebuyers, despite the market’s continued underperformance. 

“I actually predicted, wrongly, that we’d be in a good boom market by right now,” he explained. “So I don’t know if I know what I’m saying is right or not, but they’ll probably fall. I’m just a glass-half-full guy, so I’m looking for this market to come back.” 

Related: Veteran fund manager unveils eye-popping S&P 500 forecast