Mortgage Interest Rate Predictions 2026 — Expert Forecasts & Market Trends
Updated: October 2025 • 8 min read
Mortgage interest rate predictions 2026 — Analysts expect a gradual decline in U.S. mortgage rates as inflation cools and the Federal Reserve begins cautious cuts. This article explains expert forecasts, economic drivers, and what buyers can expect for fixed and adjustable-rate loans.
Where mortgage rates stand at the end of 2025
By late 2025, 30-year fixed mortgage rates average around 6.6 % (APR), down from peaks near 7.5 % in 2023. Refinancing activity has slowly returned, while housing demand remains constrained by inventory shortages.
Mortgage interest rate predictions 2026 — key forecasts
- Fannie Mae: predicts 30-year rates to average 6.0 % in Q2 2026.
- Freddie Mac: expects rates to fluctuate between 5.8 % – 6.2 %.
- Mortgage Bankers Association (MBA): projects 5.9 % by year-end 2026.
- Zillow Research: anticipates slow easing tied to inflation targets below 3 %.
Economic factors driving 2026 mortgage rates
- Federal Reserve Policy : Expected 2–3 rate cuts if core inflation stays below 3 %.
- Employment and Wages : Steady labor growth supports moderate housing demand.
- Inflation Trajectory : Slower CPI growth reduces bond yields, pulling mortgage rates down.
- Global Market Pressure : A strong U.S. dollar and foreign investment in MBS may stabilize rates.
Rate predictions by loan type (2026 outlook)
| Loan Type | Average Rate 2025 | Forecast 2026 |
|---|---|---|
| 30-Year Fixed | 6.6 % | 6.0 % |
| 15-Year Fixed | 6.0 % | 5.5 % |
| 5/1 ARM | 6.2 % | 5.7 % |
| FHA Loan | 6.3 % | 5.8 % |
| VA Loan | 6.0 % | 5.6 % |
How 2026 rates affect home buyers
Lower rates can increase purchasing power by 5–10 %. A $400 k loan at 6.5 % vs 6.0 % saves ≈ $130 monthly or $46 k over the term. Combine lower rates with reduced PMI and buyers see significant savings.
Should you refinance in 2026?
Refinancing may benefit homeowners with rates above 6.75 %. If your loan is from 2022–2024, run a quick calculation to see your break-even point. Explore our Refinance Guide.
FAQ — Mortgage Rate Predictions 2026
Will mortgage rates drop in 2026?
Most experts expect gradual declines of 0.5–0.75 points as inflation stabilizes and the Fed eases policy.
Is 2026 a good year to buy a house?
Yes. Moderating rates and rising inventory make 2026 favorable for qualified buyers with strong credit.
How low will rates go by 2027?
Forecasts suggest sub-6 % possible if inflation targets hold and economic growth remains steady.
Additional resources
– Best States to Buy a Home in 2025
– How Much House Can I Afford?
– Freddie Mac Forecast Center