Analysts expect the 30-year fixed mortgage rate to bounce between low- to mid-6% over the next two years. However, that could change as markets continue to digest changing economic data.

Keep reading to find out where mortgage interest rates could be headed through 2026 and 2027 and how it may impact the housing market.

Mortgage Rates Predictions for February 2026

Are Mortgage Rates Going Down in 2026?

Analysts don’t expect the 30-year fixed rate to move much through 2026 and 2027. However, forecasts are far from guaranteed.

It’s difficult to predict the exact path forward amid heightened economic volatility, and this overarching sense of uncertainty is reflected in the forecasts. While some industry groups expect rates to taper, others now think rates will rise slightly.

Federal Reserve Chair Jerome Powell says it best: “Forecasts are highly uncertain. Forecasting is very difficult. Forecasters are a humble lot with much to be humble about.”

Rates will remain relatively high as long as the economy continues to outpace expectations, while an economic downturn could send rates tumbling. Either way, economists don’t anticipate a dip into the 3% or 4% range in the foreseeable future. Here are the mortgage rate predictions for 2026:

• Fannie Mae: Rates Will Average 6% Through Much of 2026

The February Housing Forecast from Fannie Mae‘s Economic and Strategic Research Group predicts that 30-year fixed mortgage rates will average 6.1% in the first quarter of 2026, down meaningfully from 6.8% earlier in 2025. The group expects home price growth to stay relatively flat over the next few years.

• MBA: Rates Will Stay at 6.1% in 2026

The Mortgage Bankers Association predicts in its Mortgage Finance Forecast that 30-year mortgage rates will hold at 6.1% through most of 2026. The group’s economists believe mortgage rates have essentially already bottomed out and will remain in the low- to mid-6% range throughout 2026, 2027 and 2028.

Mortgage rates moved slightly lower over the past month as the mortgage-to-Treasury spread returned closer to 190 bps while the 10-year Treasury yield declined. The spread widened from the initial announcement that the GSEs would increase their purchases of MBS, as no further information around the size, pace, hedging, and financing strategies of these purchases was announced. We expect that mortgage rates will remain in the low-6 percent range in 2026.

• NAHB: Rates Will Average 5.99% in 2026

The National Association of Home Builders expects mortgage rates to average 5.99% in 2026. Conditions are likely to improve slightly in 2027, when the trade group expects rates to average 5.89%.

“NAHB expects single-family starts will move slightly higher this year, as mortgage rates are expected to moderate.”

-Buddy Hughes, a home builder and developer from Lexington, North Carolina, in a release from the group

• NAR: Rates Will Average 6% in 2026

The National Association of Realtors projects in its latest Quarterly U.S. Economic Forecast that mortgage rates will fall to 6% in 2026, which would help unlock some housing market activity.

“We are seeing a little better condition for more home sales … with more inventory and the lock-in effect steadily disappearing – because life-changing events are making more people list their property to move on to their next home. Next year should be better with lower mortgage rates, and that will qualify more buyers. We are expecting home sales to increase by about 14% nationwide in 2026.”

– Lawrence Yun, NAR chief economist

• Realtor.com: Rates Will Average 6.3% in 2026

The 2026 Housing Forecast from Realtor.com also calls for another year of constrained home sales as buyers are sidelined by high housing costs, although the real estate listings website expects affordability to improve modestly as mortgage rates stabilize and for-sale inventory continues to rise.

“With rates in the 2026 homebuying season expected to be well lower than last year, pending sales and new listing growth will be something to watch in the coming months.”

– Jake Krimmel, senior economist at Realtor.com

• Wells Fargo: Rates Will Average 6.14% in 2026

In its latest U.S. Economic Outlook, Wells Fargo predicts that mortgage rates will bottom out at 6.1% in the first quarter of 2026. Looking ahead, the bank’s economic group expects 30-year fixed mortgage rates to average 6.14% in 2026 and 6.19% in 2027.

“Housing market activity remains subdued. New home sales improved somewhat last fall against a backdrop of sliding mortgage rates. That said, single-family builders remain broadly pessimistic amid elevated inventory levels and challenging demand conditions.”

–The Economics Group of Wells Fargo Bank

How Fed Rate Cuts Impact Mortgages

While it might seem counterintuitive, mortgage rates actually rose in early 2025 after the Federal Open Market Committee cut the federal funds rate three times in 2024. As the FOMC cut rates in the second half of 2025, mortgage rates have trended downward – but not directly because of the central bank’s actions.

Mortgage rates fluctuate for a number of reasons, including economic conditions, investor demand and Federal Reserve policy, to name a few. It’s not a one-to-one relationship between the federal funds rate and mortgage rates. The 30-year fixed rate more closely tracks the yield on 10-year Treasury bonds.

“We don’t set mortgage rates at the Fed. We set an overnight rate. And the rates that go into mortgages are longer-term rates …,” Fed Chair Powell said in a press conference following the central bank’s July 2025 meeting. “It’s not that we don’t have any effect. We do have an effect, but we are not the main effect.”

Mortgage interest rates have fluctuated over the past two years, despite the federal funds rate being cut a half-dozen times.

The FOMC and mortgage lenders often react similarly to economic factors like inflation and employment, and lenders tend to “price in” anticipated rate cuts or increases. Interest rates on mortgages and other borrowing products tend to be higher when the economy is strong, although given the current direction toward stagflation, rates could trend downward.

The Fed rate cuts shouldn’t have an outsized impact on long-term fixed mortgage rates, but they will affect borrowers with adjustable-rate mortgages or variable-rate home equity lines of credit.

Advice for Buying or Selling a Home in 2026

Mortgage rates aren’t expected to change much over the next several quarters, which has implications for prospective homebuyers and sellers. But regardless of current mortgage rate trends, Americans will still have reasons to move, whether they want to downsize in retirement or need to relocate for a better job.

Here’s what you should consider if you’re planning on buying or selling a home in 2026.

What Buyers Should Know: Waiting for Lower Rates Comes at a Price

Good things may come to those who wait, but patience doesn’t always pay off in the housing market. In a March 2025 U.S. News survey, four in five homebuyers were waiting for mortgage rates to fall before buying a home. A quarter of them (25%) wanted to see rates below 5% before entering the market, which isn’t expected to happen in the near future.

In the time that homebuyers have been holding out for lower rates, home values have continued to rise. Home prices have appreciated by about 16% since the beginning of 2022, according to the S&P CoreLogic Case-Shiller Home Price Index – despite mortgage rates rapidly increasing in that time frame.

Housing price increases have slowed, but buyers shouldn’t expect prices to come crashing down, at least not on a national level. Here are a few home price forecasts from top U.S. housing groups:

Although home values aren’t likely to drop, it’s still positive that they probably won’t keep rising at the double-digit pace seen in 2021 and 2022. Without over-the-top bidding wars to drive home prices through the roof, buyers can expect more properties to choose from.

Buyers may also be able to close the deal without waiving important protections, such as home inspections and appraisal contingencies. What’s more, existing home inventory is forecast to improve – at least marginally – as rates drift lower and some previously rate-locked homeowners decide to sell.

Finally, buyers may find less competition in the new home construction market. Homeowners may be reluctant to sell and risk losing their low mortgage rates, but homebuilders remain eager to close the deal, especially as new home inventory rises. Although new-construction homes are typically more expensive than resale homes, builders may be willing to offer other concessions, such as price reductions or temporary interest-rate buydowns.

What Sellers Should Know: Remember That You’re a Buyer, Too

Perhaps the biggest hurdle facing sellers is finding a place to live once they’ve sold their current home. For many, that means overcoming the lock-in gap to buy a new home at today’s rates and home prices.

According to the Federal Housing Finance Agency, the average interest rate on existing mortgages is 4.4% – far lower than the current prevailing rate available to new homebuyers. In fact, more than three-quarters of homeowners have a rate below 6%, and rates aren’t expected to dip below that threshold anytime within the next few years.

Although many prospective sellers would be hard-pressed to give up their sub-3% mortgage rate, experts predict that the rate lock-in effect will eventually wear off somewhat as homeowners grow tired of waiting.
Plus, a 2023 Fannie Mae survey suggests that low rates aren’t the only factor keeping people from selling. While a fifth of mortgage borrowers (21%) say their low mortgage rate is causing them to stay in their home longer, nearly as many said they simply like their current home (19%). Perhaps unsurprisingly, 13% say they’re staying put because home prices are too high.

However, there is a silver lining for sellers who are also buyers: Many homeowners are sitting on a mountain of equity thanks to double-digit home price appreciation since 2020. Successful sellers can tap into that equity to put toward their next home purchase.

The forecast for mortgage refinance rates is pretty much the same as the forecast for mortgage purchase rates: Even if they decline somewhat, they won’t return to pandemic-era lows anytime soon. Since most homeowners have a lower rate than what’s currently available, it doesn’t really make sense to refinance to a lower rate right now.

The exception would be recent homebuyers who borrowed when mortgage rates were high in 2022 and 2023. The majority (74%) of Americans who bought a home in the past year plan on refinancing to a lower rate in the future, according to a September 2025 U.S. News survey. Many of them (45%) plan to wait until rates drop below 5%, and that is not expected to happen within the next three years.

Still, it’s possible to refinance if your goal isn’t just to get a lower rate. With rate-and-term refinancing, you can switch to a shorter repayment period, like a 15-year mortgage. Doing so can help you pay off your mortgage faster and save money in the long run, since you’ll be making fewer interest payments to the lender. Because 15-year rates run lower than 30-year mortgage rates, you may be able to improve on your current loan. However, your monthly payments may be significantly higher.

Others may want to refinance as a way to switch from an adjustable-rate mortgage, or ARM, to a fixed-rate mortgage. Refinancing to a fixed rate can help shield you from higher monthly payments when the rate adjusts, making it easier to budget for your housing costs. However, fixed rates are generally higher than adjustable rates, so it may be difficult to justify a refinance unless your ARM rate is slated to increase meaningfully. If you expect interest rates to decline in the future, you may want to hold onto your ARM today.

Additionally, some homeowners may want to refinance to access their home’s equity. A cash-out refinance means taking out a larger mortgage than your current loan payoff, allowing you to pocket your home’s equity in cash. This might be possible if your property value has risen dramatically or you’ve paid down your mortgage significantly over the past few years. But keep in mind that you’ll be taking on a larger loan and more debt, paying more interest over time. Plus, you’ll still be stuck with a higher rate. It can be cheaper in the long run to keep your current mortgage and get your cash by taking out a home equity loan or HELOC.

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