As we head into 2026, mortgage rates are expected to remain in line with today’s rates, which, while not the sharp decline some buyers may have been hoping for, are enough to see modest home price growth in the new year, economists predict.
The latest Primary Mortgage Market Survey® (PMMS®), released by Freddie Mac Thursday, aligns with recent forecasts, this week showing the 30-year fixed-rate mortgage (FRM) averaging 6.22%, a slight uptick from last week’s rate average of 6.19%.
“The average 30-year fixed-rate mortgage is well below the year-to-date average of 6.62%, providing some sense of balance to the housing market,” said Sam Khater, Freddie Mac’s chief economist.
Realtor.com Senior Economist Anthony Smith agreed, pointing to the portal’s recent 2026 housing forecast, calling the 2026 market a “turning point” as housing slowly moves back into balance.
“Looking ahead…mortgage rates will remain broadly in line with today’s levels in 2026,” Smith said. “While this is unlikely to deliver the sharp relief some buyers are hoping for, rates are expected to be low enough to help counterbalance continued, but modest, home price growth. This dynamic is expected to lower the typical monthly cost of homeownership in 2026 for the first time since 2020, with affordability improving as rising incomes bring the share of earnings needed to purchase a median-priced home back below the 30% threshold.”
Commenting on how financial markets reacted to the Federal Reserve’s third consecutive rate cut Dec. 10, Smith noted that while the Fed’s 25-basis-point cut brings the federal funds rate down to a range of 3.5% to 3.75%, the policy decision itself is not a direct catalyst for lower mortgage rates.
“Instead, markets are focused on the Fed’s updated economic projections and the growing division among policymakers,” Smith said. “Current conditions suggest that FOMC members expect rates may now be near a neutral level, future cuts could require more evidence of economic cooling. As a result, mortgage rates may remain range-bound in the low 6% area rather than falling sharply.”
Overall, he said the housing market appears positioned for gradual improvement rather than a dramatic rebound.
“Stable mortgage rates, improving affordability, and slowly rising inventory should help lift home sales off recent lows in 2026, particularly in many of the county’s top housing markets,” he said. “Still, near-term volatility remains possible as markets digest incomplete economic data and look to upcoming Fed communications for clarity on the pace and extent of future policy easing.”
At a glance
- The 30-year FRM averaged 6.22% as of December 11, 2025, up from last week when it averaged 6.19%. A year ago at this time, the 30-year FRM averaged 6.60%.
- The 15-year FRM averaged 5.54%, up from last week when it averaged 5.44%. A year ago at this time, the 15-year FRM averaged 5.84%.
For more analysis by Freddie Mac, click here.
