These days, when I talk to people looking for homes, there's a common question that comes up at the end.

"When will mortgage rates finally go down?"

I'm curious about that too. Looking at the 30-year fixed mortgage rates in the second half of 2026, I expect them to be in the mid to high 6% range.

With home prices being high, having rates at this level can be quite a burden for buyers.

However, mortgage rates are not set arbitrarily every morning.

The first number to look at is the yield on the 10-year U.S. Treasury bond.

Simply put, it's the interest rate formed in the market when the U.S. government borrows money for 10 years, and mortgage rates are significantly influenced by this movement.

Along with inflation and the bond market, especially the MBS (Mortgage-Backed Securities) market conditions, this is how the mortgage rates we actually receive from banks are determined.

Many people get confused about the Federal Reserve's interest rates.

When the news says, "The Fed lowered rates," it might seem like mortgage rates will drop the next day as well.

That's not necessarily the case.

The Fed's benchmark rate has a much more direct impact on short-term rates.

Since mortgages are heavily influenced by long-term rates, even if the Fed lowers rates, if the yield on the 10-year Treasury bond goes up, mortgage rates may not decrease as much as expected.

There's also a difference between 30-year and 15-year mortgages.

Typically, the interest rate on a 15-year fixed mortgage is lower than that of a 30-year mortgage, with a difference of about 0.5 to 0.75 percentage points.

So, one might think that a 15-year mortgage is obviously better.

The issue is the monthly payment.

For example, if you borrow $800,000, the difference in monthly payments between a 30-year and a 15-year mortgage can be significant.

With a 15-year mortgage, you pay much less interest and own your home faster, but you need to be able to handle the monthly cash flow.

Therefore, it's important not to just look for the lowest rate but to first calculate how much you can comfortably pay each month.

Also, even if you go to the same bank on the same day, the rates can vary from person to person.

This is because factors like credit score, down payment, debt-to-income ratio (DTI), and loan amount all play a role.

Credit score is particularly important.

A person with a score above 760 will not receive the same terms as someone in the 600s, even if they are buying the same priced home. In some cases, the difference can be more than 0.5 percentage points.

"It's just 0.5%, what's the big deal?"

This might be an easy thought, but in a market like LA where loans are often between $700,000 and $1,000,000, it makes a significant difference over 30 years.

There are also people asking about ARMs (Adjustable Rate Mortgages) again these days.

Products like 5/6 ARM or 7/6 ARM have fixed rates for an initial period and then adjust based on market conditions.

If the initial rate is lower than a 30-year fixed, it might be worth considering for someone who plans to sell or refinance after a few years.

However, if you plan to stay for 15 or 20 years, the situation is different.

If you dislike the idea of fluctuating monthly payments due to uncertain future rates, a 30-year fixed mortgage can provide peace of mind.

In LA, there's another factor to consider.

Home prices are so high that the elevated Conforming Loan Limits apply to high-cost areas.

However, if you buy a large home in an expensive neighborhood, the loan amount may exceed the limit and become a Jumbo Loan.

So, it's wise to first check whether the loan you'll receive is Conventional or Jumbo before hastily choosing a home.

Especially among Koreans, there are many self-employed individuals.

For W-2 employees, income verification is relatively straightforward, but for business owners, tax returns and business income are scrutinized more closely.

If you're thinking of buying a home, it's a good idea to manage your credit card balances and organize your tax documents and bank statements a few months in advance.

And don't just stop after asking one bank.

If you get quotes from two or three banks on the same day under the same conditions, you might find more differences than you expect.

No one can accurately predict whether mortgage rates will drop to 5% or rise to 7% in the future.

Ultimately, what matters when buying a home is not hitting the lowest point but whether you can comfortably manage the current rates.

If rates go down, you might consider refinancing later, but buying a home that you can't afford now just because you think, "Rates will go down soon," is a completely different issue.