Will 30‑Year Fixed Mortgage Rates Go Down in 2026?

As mortgage rates continue to shape the housing market, many homebuyers and homeowners are looking ahead to see what 2026 might bring. The question on everyone’s mind is whether the 30‑year fixed mortgage rate will finally ease after several years of elevated borrowing costs.

Most economic forecasts point to a gradual decline in rates by the end of 2026, though not a return to the historically low levels seen in the early 2020s. Experts suggest that rates will likely settle somewhere around the high‑5% range, assuming inflation continues to cool and the Federal Reserve begins to loosen its monetary stance.

[What Leading Forecasts Indicate]

Fannie Mae’s economic outlook anticipates the average 30‑year fixed rate drifting to roughly 5.9% by late 2026. That’s a modest improvement from the low‑ to mid‑6% range expected in 2025. Other major forecasts from mortgage lenders and industry analysts generally align with this view, clustering around the 6% mark.

This shared outlook suggests that a meaningful, yet measured, decline is more realistic than a dramatic drop. Rates are projected to move lower, but the once‑common 3% mortgage rate days are unlikely to return soon.

[What’s Driving These Predictions]

Several factors influence where mortgage rates are heading. A key driver is the Federal Reserve’s expected path for interest rates. If the Fed begins implementing moderate rate cuts in response to cooling inflation—anticipated to stabilize near the mid‑2% range—bond yields could ease, leading to lower mortgage rates.

However, the decline may be limited. Many experts expect the 10‑year Treasury yield to remain close to 4%, with risk premiums staying relatively firm. These pressures create a ceiling that could keep mortgage rates from dropping more than about a point over the next two years.

[What This Means for Buyers and Homeowners]

For buyers considering a purchase now, the outlook suggests potential for modest relief in the coming years. If you secure a 30‑year fixed mortgage around current levels—roughly in the low‑6% range, there may be an opportunity to refinance down the line should rates fall closer to the high‑5s by late 2026.

Still, it’s important not to base major financial decisions solely on predictions. Market conditions can shift quickly, especially with inflation trends and Federal Reserve policy decisions still uncertain. Financial planners generally advise focusing on your budget, your long‑term goals, and your housing needs today, while keeping an eye open for refinance opportunities if lower rates do materialize.

[The Bottom Line]

While 2026 is shaping up to bring some relief for mortgage borrowers, expectations should remain realistic. Most forecasts call for a gradual, controlled decline rather than a major reset. A combination of steady inflation progress and restrained Fed policy easing may nudge mortgage rates lower, but not enough to revisit the ultra‑low environment of the past decade.

For now, staying informed and flexible remains the most strategic approach for anyone navigating the housing market in the next couple of years.

Sources:
https://www.fanniemae.com/newsroom/fannie-mae-news/mortgage-rates-expected-move-below-6-percent-end-2026
https://www.realestatenews.com/2025/11/21/home-sales-projections-fall-in-revised-2026-forecast
https://wealthtender.com/insights/how-far-will-interest-rates-drop-in-2025-and-2026/
https://www.fanniemae.com/newsroom/fannie-mae-news/mortgage-rates-expected-move-below-6-percent-end-2026