Rate Outlook
After a turbulent period that saw 30-year fixed rates spike above 7.5% in late 2023, the mortgage market has entered a more favorable chapter. The Federal Reserve began cutting rates in September 2024, and continued easing into 2025, bringing meaningful relief to borrowers.
As of early 2026, the 30-year fixed rate sits in the low 6% range -- a significant improvement from the post-pandemic peak. Most major forecasters, including the Mortgage Bankers Association and Fannie Mae, expect rates to remain in the 5.5% to 6.5% corridor through the balance of 2026.
Whether rates dip below 6% hinges on inflation continuing to moderate toward the Fed's 2% target. Core PCE has been trending in the right direction, but progress has been gradual rather than dramatic. The labor market remains resilient, which is positive for the broader economy but may limit how aggressively the Fed cuts.
For prospective homebuyers, the takeaway is cautiously optimistic: rates are unlikely to return to the 3% pandemic-era lows, but today's levels are materially better than where they were 18 months ago. Buyers who are financially ready should not wait for a "perfect" rate that may never arrive.
52-Week Rate Trend
How rates have moved over the past year
Key Factors to Watch
The data points that will shape where rates go next
Federal Reserve Policy
Rate decisions and forward guidance from the FOMC set the tone for borrowing costs across the economy.
Inflation Data
CPI, PCE, and core inflation trends directly influence how quickly the Fed eases or tightens monetary policy.
Employment & Wages
Jobs reports, unemployment rate, and wage growth signal the health of the economy and inflationary pressure.
Housing Supply
Inventory levels and new construction affect affordability dynamics independently of interest rates.
Expert Tips for Rate-Watchers
Practical advice from mortgage professionals
Don't try to time the market perfectly
Even professional forecasters are routinely off by 1-2%. Waiting for the "perfect" rate often means missing the right home.
Get pre-approved now so you're ready when rates dip
Pre-approval takes days; finding a home takes weeks. Having your financing ready means you can act on opportunities fast.
Consider a rate lock with float-down option
A float-down lets you lock in today's rate while still benefiting if rates drop before closing.
Focus on affordability, not just the rate number
Your monthly payment matters more than the rate itself. A slightly higher rate on a home you can afford beats waiting indefinitely.
Mortgage Rate Forecast FAQ
Most forecasters expect 30-year fixed rates to remain in the 5.5% to 6.5% range through 2026. Further declines depend on inflation continuing to moderate and the Fed maintaining its current easing trajectory.
The Fed began cutting rates in late 2024 and continued into 2025. Additional cuts in 2026 are possible if inflation stays near the 2% target, but the pace and timing depend on economic data.
Trying to time the market is risky. If you find a home you can afford at today's rates, buying now and refinancing later if rates drop is often a better strategy than waiting.
Forecasts provide directional guidance but are not precise predictions. Even major institutions have been off by 1-2 percentage points in recent years. Use forecasts as one data point, not a guarantee.
Persistent or rising inflation, a strong labor market that keeps wages growing quickly, geopolitical shocks, or increased government borrowing could all push rates higher than expected.
Mortgage rates are influenced by the Fed Funds Rate but not directly tied to it. Mortgage rates track the 10-year Treasury yield more closely, which reflects market expectations about future inflation and economic growth.
Rate Resources
Get Ahead of Rate Changes
Get pre-approved now so you're ready when the right rate arrives.