The average U.S. long-term mortgage rate ticked up to 6.1% for the second week in a row in January, according to mortgage buyer Freddie Mac, cited by The Associated Press. Despite mortgage rates being the lowest in more than three years, borrowing costs combined with high home prices made homes harder to afford, keeping home sales low.
This dynamic raises a question for buyers and sellers: “Which comes first, the chicken or the egg?” GOBankingRates spoke with realtors and lenders for their insights on what matters most in 2026: home prices or mortgage rates. Find out what they said below.
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Home Prices Are a Big Obstacle
Home prices are often a huge barrier to home ownership for buyers. The price of a home determines the loan amount and affects ongoing costs such as property taxes and insurance. Once a deal closes, that number does not change.
Several lenders note that while mortgage rates can fluctuate over time, the purchase remains constant. Buyers may be able to refinance or adjust their loan if rates fall, but there is no way to reverse overpaying for a home.
“Buyers should focus on home price first,” said Angela Tourville, branch manager at Annie Mac Home Mortgage. Once a price is agreed upon, that number is fixed. Mortgage rates, by contrast, are generally temporary. Overpaying on price is much harder to correct.”
Agents working directly with buyers say this is most apparent in markets where prices haven’t come down much, even as demand has slowed.
Kirkham agreed.
“From a long-term financial perspective, purchase price still matters more,” said Ryan Kirkham, real estate expert and managing broker at Summit Sotheby’s International Realty. A mortgage rate can change through refinancing, but the price you pay for a home is permanent.”
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Waiting for Rates To Drop Can Backfire
Some buyers wait for mortgage rates to fall before considering a home purchase. However, agents say that a decision can come with trade-offs, especially in markets with limited inventory.
“I often see buyers put their plans on hold waiting for rates to drop, without fully considering that prices may continue to rise and inventory may tighten in the meantime,” said Leo Peak, realtor with Peak Family Real Estate Group.
Mortgage lenders echo that concern.
“Buyers should focus more on home price and overall affordability than trying to time mortgage rates,” said Dan Snyder, CEO of mortgage company Lower. Small rate changes matter less than purchase price, inventory conditions and how the monthly payment fits into a buyer’s long-term budget.”
When Mortgage Rates Tip the Scale
However, mortgage rates still play an important role for buyers, particularly in monthly payments and loan qualification. Rates can be significant for buyers who are close to what they can afford.
“On a $400,000 home, dropping the rate from 6.5% to 6% lowers the monthly payment by about $130,” said Jason Iacovelli, senior loan officer at reAlpha Mortgage. [However,] if that same home’s price rises to $440,000 while a buyer waits, the payment increases by more than $250 a month, even with the lower rate.”
Other lenders stress that what’s most important is focusing on a manageable monthly payment rather than locking in a rate that may change.
“The real number that matters is the monthly payment,” said Jake Vehige, president of mortgage lending at Neighbors Bank. “While rates matter, they aren’t permanent. Buying within a payment range that fits comfortably into your life is more important than securing a specific rate,” Vehige said.
What Matters More in 2026: Mortgage Rates or Home Prices?
While mortgage rates affect monthly payments and loan approval, according to experts, the bigger challenge for buyers in 2026 is home prices, since they are locked in at closing. However, ultimately, it’s a personal choice and the answer depends on what is holding a buyer back the most. In a market where affordability remains tight, understanding which factor is the bigger hurdle can help buyers better understand their options.
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This article originally appeared on GOBankingRates.com: Mortgage Rates vs. Home Prices in 2026: Which One Matters More Right Now?
