Mortgage rates in 2026 are projected to stay above the historic lows experienced during the pandemic, but homebuyers may see some alleviation in borrowing costs. According to Ted Rossman, a senior industry analyst at Bankrate, it is possible that the average 30-year fixed mortgage rate could dip below 6% for the first time since summer 2022, potentially reaching as low as 5.5%. This forecast anticipates fluctuations around the 6% mark throughout the year due to various economic pressures including inflation and Federal Reserve policies.
Bankrate’s mortgage forecast for 2026 estimates an average rate of 6.1%, a slight decrease from late 2025 rates, with projected lows of 5.7% — the lowest since August 2022 — and potential highs of 6.5%, indicative of ongoing economic volatility.
The mortgage landscape has seen dramatic shifts recently, particularly during the pandemic, when the Federal Reserve injected capital to stimulate the economy, resulting in historically low mortgage rates under 3% in 2020 and 2021. However, this trend reversed sharply in 2022 as inflation surged and the Fed began increasing rates, leading to a notable downturn in home sales and a so-called “housing recession.”
The anticipated decline in mortgage rates might encourage some long-term renters to enter the housing market and may prompt current homeowners, who are often reluctant to sell due to locked-in lower rates, to consider moving. Lisa Sturtevant, chief economist for Bright MLS, indicates that although the housing market will still face challenges in 2026, slightly lower mortgage rates and slower price growth could improve affordability, enticing more buyers.
Economic conditions that influence mortgage rates remain unpredictable. Factors such as inflation, job market conditions, and the historical widening gap between Treasury rates and mortgage rates will significantly shape the mortgage environment in 2026. Banks are presently demanding higher risk premiums, complicating predictions about when rates might stabilize or decrease.
Homebuyers should be aware that recent history has shown volatility in mortgage rates. In 2025, rates oscillated above 6.5% for much of the year before dipping to a low of 6.25% in October following signs of a weakening labor market. As people consider home loans in 2026, they should prepare for potential competition, especially if rates fall below 6% and encourage more buyers to enter the market.
For those who secured mortgages at higher rates in 2023, refinancing could become an attractive option should rates decrease significantly in the coming year. For example, a homeowner who borrowed $400,000 at an interest rate of 7.25% could see monthly payments reduced by about $331 if they refinance at a lower rate of 6%.
Regardless of individual circumstances, it remains imperative for consumers to conduct thorough research and prepare financially when navigating the mortgage landscape. Homebuyers are advised to shop around for the best rates, ensure their credit scores are in optimal condition, and not to overly fixate on trying to predict market movements. Adopting a flexible approach can serve buyers well, as they can always consider refinancing in the future if rates become more favorable.
As consumers face an evolving real estate landscape, a cautiously optimistic outlook may provide hope for potential homebuyers and homeowners alike. While the complexities of mortgage rates pose challenges, incremental improvements to borrowing costs could reignite interest in the housing market and encourage mobility among current homeowners.