- Most prospective buyers (57%) expect mortgage rates to be higher a year from now, yet only 32% would wait for rates to fall before purchasing a home, down 7 points from a year ago.
- Fewer buyers say lower rates, lower prices or more inventory would motivate them to act, a sign they are adjusting to today’s market rather than waiting for a perfect one.
- Veterans and service members see their VA home loan benefit as an edge: 82% say it gives them an advantage, and Gen Z military buyers report greater confidence than their civilian peers.
The Q3 2026 State of Mind Survey from Veterans United Home Loans finds that most buyers expect borrowing costs to climb over the next year, yet fewer of them are willing to hold off on buying because of it.
57% of respondents expect higher mortgage rates a year from now, up from 45% a year ago. Even so, only 32% would hold out for lower rates before buying, down 7 points from last year, and 73% intend to buy within the next 12 months.
For a growing share of buyers, a rate cut is no longer a precondition for buying a home. Here’s a closer look at what’s behind the shift.
Buyers Are Less Willing to Hold Out for a Better Market
Fewer buyers say they need a better market before they move forward. Lower rates would motivate 43% of buyers, down from 49% last quarter, while lower prices (47%) and more inventory (25%) each slipped 4 points.
"Buyers aren't expecting a perfect market," said Chris Birk, vice president of mortgage insight at Veterans United. "More of them appear willing to make a move without waiting for rates or prices to fall. They're adjusting their expectations to the market that's in front of them."
Veterans, service members and civilians are all less willing to wait for lower home prices. Among Veterans and service members, 32% would hold off on buying, compared with 39% in Q2, while 34% of civilians would, down from 40%. On rates, Veterans and service members dipped from 34% to 31%, while civilians held at 35%. The groups differ in what motivates them to act. Civilians showed the bigger drop in citing lower rates as a trigger (48% to 39%), while Veterans and service members slipped only slightly (49% to 46%).
Buyers’ sense of an acceptable rate has also moved. Veterans’ acceptable rate rose a full point to 5.0% in Q3, from 4.0% in Q2, while civilians held at about 5.0%.
Q3 2026 Market Conditions: Veteran vs Civilian Homebuyers
| Veterans & Service Members (Q2 to Q3) | Civilians (Q2 to Q3) | |
|---|---|---|
| Would wait for lower prices | 39% to 32% | 40% to 34% |
| Would wait for lower mortgage rates | 34% to 31% | Held at 35% |
| Lower interest rates are a reason to move forward | 49% to 46% | 48% to 39% |
| More housing inventory is a reason to move forward | 31% to 25% | 24% to 25% |
Veterans Still See the VA Loan as a Competitive Edge
A large majority of Veterans and service members (82%) say their VA home loan benefit gives them an advantage in today's market.
"The VA home loan can be valuable when buyers are dealing with high prices and higher borrowing costs," Birk said. "For qualified Veterans and service members, benefits like no down payment and no private mortgage insurance can provide more flexibility when it's time to buy. And in today's market, increased inventory and greater opportunities to negotiate seller concessions are giving Veterans something many haven't had in recent years – more options, negotiating power and a better chance at finding the home they've always wanted."
Gen Z Veterans and Service Members Show More Confidence
The confidence gap shows up with younger buyers, too. Among Gen Z Veterans and service members, 60% feel homeownership is within reach, versus 44% of Gen Z civilians.
These buyers are also on a shorter timeline. Nearly a quarter (23%) expect to buy within three months, compared with 7% of their civilian peers. And 78% of Gen Z Veterans and service members say their VA home loan benefit gives them an advantage in today's market.
Gen Z Homebuyers: Military vs Civilian
| Gen Z Veterans & Service Members | Gen Z Civilians | |
|---|---|---|
| Buying a home feels within reach | 60% | 44% |
| More than 50% confident they will buy within their timeframe | 54% | 33% |
| Plan to purchase within the next three months | 23% | 7% |
Even with higher rates expected, the latest survey shows buyers moving ahead on their own timelines. Fewer are holding out for lower rates, prices or more inventory, and Veterans and service members say the VA home loan benefit gives them an edge in the process.
Survey Methodology
The Veterans United State of Mind report tracks how prospective homebuyers feel about the housing market, their path to buying and what is driving their decisions. This year’s third quarter survey reached more than 900 prospective homebuyers, including Veterans, service members and civilians who plan to buy within the next three years.
The survey was conducted online September 1 to 15, 2026 by Sparketing. The survey is fielded quarterly to track homebuyer readiness, financial confidence and the tools buyers use in the homebuying process. Comparisons to Q2 2026 reference data collected in June 2026. Year-over-year comparisons reference Q3 2025 data from the same survey series (892 respondents).
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