Mortgage rates are expected to dip below 6% by the end of 2026, a level not seen in three years, according to Fannie Mae’s latest projections.
This shift is anticipated to impact the housing market and affordability for potential homebuyers. The downward trend in rates is influenced by various factors including the Federal Reserve’s interest rate decisions, inflation data, and market movements.
FULL STORY: Here’s When Mortgage Rates Could Finally Fall Below 6%
Key takeaways
-
Fannie Mae foresees mortgage rates dropping to 5.9% by the end of 2026, a significant decrease from the current 6.4% average.
-
Mortgage rates, closely tied to the 10-year Treasury yield, are expected to rise slightly by the end of the year, potentially reaching around 6.4%.
-
The housing market’s affordability challenges persist, with Fannie Mae revising down projections for total home sales in 2025 and 2026.
-
Affordability levels from 2016 to 2019 may require drastic changes, such as a substantial decrease in home prices, a significant increase in household income, or a considerable drop in mortgage rates.
-
Despite the potential impact of rates falling below 6%, affordability for homebuyers remains dependent on a combination of factors including home prices and income levels.
This summary has been generated with AI tools and edited by Realtor.com News & Insights editors. The full story, written and edited by Realtor.com News & Insights newsroom journalists, is linked at the top of the summary.