5.9%? 6.4%? A Mortgage Rate Forecast For 2026

• November 25th

by UrbanTurf Staff

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As we round the corner into 2026, predictions for 30-year fixed mortgage rates are showing cautious optimism—yet with ample caveats.

The Fannie Mae Economic & Strategic Research Group projects the average 30-year rate will fall to about 5.9 percent by the end of 2026. That would mark a meaningful drop from where rates have been for a couple years—but it still leaves borrowing costs higher than the ultra-low era of the 2010s.

Even as headline numbers drift lower, many industry watchers caution that the drop won’t be dramatic or uniform. The Mortgage Bankers Association forecasts that, because of pressures like elevated inflation expectations and large federal deficits, long-term mortgage rates may linger in the 6.0 to 6.5% band well into the next few years. 

What this means for the housing market is nuanced. A modest drop in rates to the high-5%s could peel back some of the affordability pressures that have kept many potential buyers sidelined. The Fannie Mae outlook estimates mortgage originations rising from $1.85 trillion in 2025 to $2.32 trillion in 2026, reflecting a pickup in activity if borrowing costs ease. But even with that uptick, structural constraints—tight inventory in many markets, high home-price baselines, and elevated payment burdens—mean that any momentum will be incremental.

This article originally published at https://dc.urbanturf.com/articles/blog/59_64_a_mortgage_rate_forecast_for_2026/24106.