What is the outlook for 30-year mortgage rates in 2026?

Projections suggest 30-year mortgage rates could decline in 2026, with some forecasts indicating a move below 6% by year-end.

Are current mortgage rates historically high?

While higher than pandemic lows, current mortgage rates near 7% are historically normal compared to rates seen from the 1970s through the 1990s.

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Fed Rate Cut Looms: Mortgage Rates May Dip Below 6%

Q: Will the Federal Reserve cut rates in December 2025?

Traders are pricing in a high probability of a 25-basis-point cut by the Federal Reserve at its upcoming meeting in December 2025.

3 Dec

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Summary

30-year fixed mortgage rates are stable at 6.11% as December begins.
Experts predict a Federal Reserve rate cut in December 2025.
Rates are expected to decline in 2026, potentially below 6%.

Fed Rate Cut Looms: Mortgage Rates May Dip Below 6%

Mortgage rates are holding steady at the start of December, with the average 30-year fixed rate at 6.11%. This stability comes as traders price in a high probability of a 25-basis-point cut by the Federal Reserve at its upcoming meeting. This anticipated easing is driven by recent weak labor data and signals from Fed officials.

Looking ahead to 2026, projections suggest a gradual decline in mortgage rates. Fannie Mae forecasts 30-year rates could fall to 5.9% by the end of 2026, potentially dipping below 6%. This trend is contingent on sustained Federal Reserve policy loosening and a softening economy. However, other institutions offer more conservative outlooks, indicating limited overall relief.

While current rates are significantly higher than pandemic lows, they represent an improvement from peaks above 7% earlier in the year. Borrowers can still mitigate costs by improving their financial profiles, comparing lender offers, and exploring options like discount points or builder rate buydowns.