2026 Mortgage Rate Forecast: What Experts Are Predicting

After two years of elevated mortgage rates that reshaped the housing market, 2026 is shaping up to be the year buyers have been waiting for. With the Federal Reserve having cut its benchmark rate multiple times since late 2024, and inflation finally cooling to near the Fed's 2% target, the conditions for meaningfully lower mortgage rates are finally aligning.

Here's what leading economists and mortgage industry experts are projecting — and what it means for your homebuying or refinancing plans.

Where Rates Stand Today

As of late February 2026, the average 30-year fixed mortgage rate sits at approximately 6.04%, down from peaks near 7.8% in October 2023. That's a significant improvement, but still well above the sub-3% rates that defined the pandemic era.

Expert Predictions for 2026

Here's where the major forecasting institutions see rates heading:

• Mortgage Bankers Association (MBA): Projects 30-year rates averaging 5.6% by Q4 2026, with potential dips to 5.3% during favorable market conditions
• National Association of Realtors (NAR): Expects rates to stabilize in the 5.5-5.8% range by mid-year
• Fannie Mae: Forecasts rates gradually declining to 5.7% by year-end, driven by continued Fed easing
• Goldman Sachs: More optimistic, projecting rates could touch 5.2% by late 2026 if inflation remains subdued

Key Drivers Behind Lower Rates

1. Federal Reserve Policy

The Fed has signaled continued easing in 2026, with economists pricing in 2-3 additional rate cuts this year. While Fed rate cuts don't directly set mortgage rates, they influence short-term rates and signal the direction of monetary policy, which does impact long-term lending rates.

2. Inflation Cooling

After years of stubborn inflation, the CPI has finally settled near the Fed's 2% target. Lower inflation reduces the risk premium that lenders build into mortgage rates, allowing for more competitive pricing.

3. 10-Year Treasury Movement

Mortgage rates closely track the 10-year Treasury yield, which has been trending lower as investors seek safe-haven assets amid global economic uncertainty. If the 10-year drops to the 3.5-3.8% range as many expect, 30-year mortgage rates could follow suit.

4. Increased Lender Competition

As rates decline and purchase volume increases, lenders are competing more aggressively for borrowers. This competitive environment can push rates lower than economic fundamentals alone would suggest.

What This Means For You

If You're Buying a Home

Current rates represent the lowest levels in over three years. While rates may continue to decline, waiting for the absolute bottom is risky — you can always refinance later if rates drop further, but you can't get back time lost in building equity and enjoying your home.

If You're Considering Refinancing

If your current rate is above 7%, refinancing now could save you $200-400 per month. Use the break-even analysis: divide your closing costs by your monthly savings. If you plan to stay in the home longer than the break-even period, refinancing makes financial sense.

If You're Waiting to Buy

While waiting for lower rates might seem wise, remember that lower rates typically bring more buyers into the market, increasing competition and driving up home prices. The best total cost often comes from buying when the market is less competitive — even at slightly higher rates — and refinancing later.

Risks to the Forecast

The biggest risks to the optimistic rate outlook include:

• Inflation resurgence: If tariffs or supply chain issues reignite inflation, the Fed could pause or reverse course
• Geopolitical events: Global uncertainty could create volatility in bond markets
• Hot jobs market: Unexpectedly strong employment data could delay rate cuts
• Federal deficit concerns: Rising government debt could push long-term yields higher

Bottom Line

The consensus among experts is clear: mortgage rates are heading lower in 2026, with the question being how far and how fast. Whether you're buying, refinancing, or simply monitoring the market, the trend is in your favor.

The smartest approach? Get pre-approved now, understand your purchasing power, and be ready to act when you find the right opportunity. Rates are already significantly better than they've been — and they're likely to improve further as the year progresses.