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