Last updated: September 25, 2026. This article summarizes published forecasts for US mortgage rates for the rest of 2026 and into 2027. Forecasts are not guarantees, and this is educational content, not financial advice.
A year ago, many economists expected mortgage rates to fall below 6% by the end of 2026. Instead, rates have moved the other way. The average 30 year fixed rate climbed above 7% in September 2026, the Federal Reserve has started raising interest rates again and forecasters have revised their outlooks upward.
In this article we look at where rates stand today, what the major forecasters now expect, what is driving rates higher and what it all means if you are planning to buy or refinance.
Where Mortgage Rates Stand Today
According to Freddie Mac’s Primary Mortgage Market Survey for the week of September 24, 2026:
| Loan type | This week | Last week | One year ago |
|---|---|---|---|
| 30 year fixed | 7.03% | 6.95% | 6.30% |
| 15 year fixed | 6.42% | 6.26% | 5.49% |
Rates have now risen for five weeks in a row. The 30 year average was 6.66% at the end of August, so it has climbed by more than a third of a percentage point in less than a month.
Freddie Mac’s chief economist, Sam Khater, noted that “the housing market remains supported by a solid labor market and an economy that is growing at a healthy rate.”
What the Experts Predict
Here are the latest published forecasts for the average 30 year fixed mortgage rate:
| Forecaster | End of 2026 | 2027 | Date of forecast |
|---|---|---|---|
| Fannie Mae | 6.8% | About 6.7% throughout the year | September 2026 |
| Mortgage Bankers Association (MBA) | 6.8% | 6.8% in the first half, then similar to Fannie Mae | September 2026 |
| Keefe, Bruyette & Woods | 6.5% | Not published | September 2026 |
| Realtor.com | 6.3% | Not published | July 2026 (before the latest rise) |
Sources: National Mortgage News and Scotsman Guide reporting on Fannie Mae and MBA forecasts (September 21, 2026); Realtor.com midyear forecast (July 2026).
How forecasts have changed
Forecasts have moved sharply higher over the past year:
| Forecast | Predicted rate for end of 2026 |
|---|---|
| Fannie Mae, September 2025 | 5.9% |
| MBA, July 2026 | 6.5% |
| MBA, August 2026 | 6.7% |
| Fannie Mae and MBA, September 2026 | 6.8% |
| Actual rate, September 24, 2026 | 7.03% |
This is a useful reminder that even professional forecasts can be wrong by a wide margin. When conditions change, as they did in 2026 with rising energy prices and inflation, forecasts can shift quickly.
What the forecasts have in common
- No major drop is expected soon. None of the major forecasters expects rates to return to the 5% range in the next year.
- Rates may ease slightly from current levels. Forecasts of 6.5% to 6.8% by year end imply modest relief from today’s 7.03%, but not a big change.
- Rates are likely to stay elevated in 2027. Fannie Mae and the MBA both expect rates to remain in the high 6% range next year.
Why Mortgage Rates Have Risen in 2026
1. Inflation has picked up again
The Consumer Price Index rose 0.4% in August 2026, its largest monthly increase in four months, and 3.4% compared with a year earlier, well above the Federal Reserve’s 2% target. Rising energy costs have played a big part. Oil prices crossed $100 a barrel in early September amid geopolitical tensions involving Iran.
Higher inflation erodes the value of the fixed payments that mortgage investors receive, so they demand higher yields, which pushes mortgage rates up.
2. The Fed has started raising rates
On September 17, 2026, the Federal Reserve raised its benchmark rate by 0.25 percentage points to a range of 3.75% to 4.00%, in a unanimous 12 to 0 vote. Fed Chair Kevin Warsh said, “The plain fact is that inflation is too high, and has been for too long.”
The Fed’s projections point to one more quarter point increase in 2026, and possibly another in early 2027. The next policy meetings are on October 27 and 28 and in December.
The Fed does not set mortgage rates directly, but its decisions and its outlook for inflation strongly influence the bond market, which does.
3. Treasury yields have jumped
Mortgage rates tend to track the 10 year Treasury yield. In September 2026, the 10 year yield reached 5% for the first time since 2007, up from around 4% in late February. The MBA expects it to remain high, at about 4.8% at the end of 2026 and 4.7% in 2027.
The gap between mortgage rates and the 10 year yield, often around 1.7 to 2 percentage points, also matters. It reflects lender costs and investor demand for mortgage bonds.
4. The economy is still strong
Unemployment was 4.1% in August 2026, and employers added 162,000 jobs. A resilient economy supports higher interest rates, because the Fed feels less need to cut rates to support growth.
How Mortgage Rates Are Actually Set
It helps to understand what sits behind the headline average. Most US mortgages are bundled into mortgage backed securities and sold to investors. The rate a lender offers you depends largely on what those investors are willing to pay, which in turn follows the 10 year Treasury yield, expectations for inflation and the risk that borrowers will refinance early.
On top of that market rate, each lender adds its own margin to cover costs and profit, and then adjusts the price for your individual risk. Your credit score, down payment, loan type, loan amount and property type can all move your rate up or down. That is why two borrowers applying on the same day can receive quotes that differ by half a percentage point or more.
Rates by Loan Type
Forecasts usually refer to the 30 year fixed conforming rate, but other loans move differently:
| Loan type | How it compares with the 30 year average |
|---|---|
| 15 year fixed | Usually around 0.5 to 0.7 points lower |
| FHA and VA loans | Often slightly lower rates, but with mortgage insurance or funding fees |
| Jumbo loans | Can be similar to or slightly higher than conforming rates, depending on the lender |
| Adjustable rate mortgages | Initial rates may be lower, but can rise after the fixed period |
| Investment property loans | Usually higher, often by 0.5 points or more |
What the Housing Market Forecasts Show
Higher rates are expected to keep the housing market subdued. Fannie Mae and the MBA both expect home sales of around 4.1 million in 2026, well below the levels of the early 2020s. The MBA forecasts total mortgage originations of about $2.12 trillion in 2026, of which roughly $1.42 trillion is purchase lending.
For buyers, a quieter market can mean less competition, more room to negotiate on price and more sellers willing to pay part of the closing costs or fund a temporary rate buydown.
What Could Change the Outlook
Several developments could push rates lower or higher than expected:
- Energy prices. A fall in oil prices would ease inflation and could bring yields down quickly.
- Economic data. A sudden rise in unemployment or a sharp slowdown could lead the Fed to stop raising rates or even cut them.
- Government borrowing. Large budget deficits increase the supply of Treasury bonds, which can keep yields high.
- Global events. Geopolitical crises can push investors toward Treasuries, lowering yields, or disrupt energy supplies, raising inflation.
Three Possible Scenarios for the Rest of 2026
No one can predict rates with certainty, but it helps to think in scenarios:
| Scenario | What would need to happen | Possible 30 year rate by year end |
|---|---|---|
| Rates ease | Inflation cools, oil prices fall and bond yields drop | Around 6.3% to 6.5% |
| Base case (forecasters’ view) | Inflation stays elevated but stable; one more Fed increase | Around 6.8% |
| Rates rise further | Inflation accelerates and the Fed raises rates more than expected | 7.25% or higher |
Scenarios are illustrative and based on the range of published forecasts. They are not predictions by MortgageCompass.
What Rate Changes Mean for Your Payment
Here is the monthly principal and interest payment on a $400,000, 30 year fixed loan at different rates:
| Rate | Monthly payment | Difference vs 7.03% |
|---|---|---|
| 6.00% | $2,398 | $271 less |
| 6.50% | $2,528 | $141 less |
| 6.80% (forecast) | $2,608 | $61 less |
| 7.03% (today’s average) | $2,669 | |
| 7.50% | $2,797 | $128 more |
| 8.00% | $2,935 | $266 more |
Excludes property taxes, insurance and mortgage insurance.
Even if forecasts prove correct, the expected drop to 6.8% would save only around $61 a month on a $400,000 loan. Waiting for lower rates is a gamble that may not pay off.
What This Means for Homebuyers
Should you wait for lower rates?
Waiting makes sense only if you are not ready to buy anyway. The main forecasts expect only modest relief, and rates could also rise further. Meanwhile, home prices, rents and your own circumstances may change.
Consider buying now if:
- You have a stable income, a solid down payment and an emergency fund.
- You find a home that fits your long term plans.
- The monthly payment is comfortable at today’s rates.
Consider waiting if:
- The payment would stretch your budget.
- You could significantly improve your credit score or down payment in the next few months.
- You are not sure you will stay in the area for at least five years.
Should you lock your rate?
If you are already under contract, a rate lock protects you from further increases before closing. With rates rising for five weeks in a row, many buyers are choosing to lock as soon as they have an accepted offer. Ask your lender about lock periods and whether a float down option is available if rates fall.
Consider other ways to lower your rate
- Improve your credit score before applying.
- Compare offers from at least three lenders.
- Consider mortgage points if you plan to keep the loan for many years.
- Look at adjustable rate mortgages, which may start lower, but understand the risks.
- Ask about seller paid rate buydowns, which are common in slower markets.
What This Means for Homeowners Thinking of Refinancing
With rates above 7%, refinancing to get a lower rate makes sense mainly for homeowners who took out loans when rates were even higher, such as in late 2023 when the 30 year average peaked at around 7.8%. The MBA now expects refinance volume to fall to about $634 billion in 2027, down from about $700 billion in 2026, reflecting limited opportunities to save.
If you are considering a refinance, calculate your break even point: divide your closing costs by your monthly savings to see how long it will take to recover the costs.
How to Follow Mortgage Rates
- Freddie Mac’s PMMS, published every Thursday.
- Federal Reserve meetings and the Fed’s projections.
- Monthly inflation reports, such as the Consumer Price Index.
- The 10 year Treasury yield, which moves daily.
- Updated forecasts from Fannie Mae and the MBA, usually published monthly.
You can also check our weekly update of current mortgage rates today to see the latest averages and how they affect your payment.
Frequently Asked Questions
Will mortgage rates go down in 2026?
The major forecasters expect a small decline from current levels, to around 6.5% to 6.8% by the end of 2026, but not a large drop. Rates could also rise further if inflation stays high.
Will mortgage rates go back to 3%?
It is very unlikely in the foreseeable future. The ultra low rates of 2020 and 2021 were driven by the pandemic and emergency Fed policy. Since 1971, the 30 year rate has averaged around 7.7%.
Why do mortgage rates go up when the Fed raises rates?
The Fed sets short term rates, not mortgage rates directly. But a Fed rate increase signals concern about inflation, which tends to push up long term bond yields, and mortgage rates usually follow.
How accurate are mortgage rate forecasts?
Not very, especially more than a few months ahead. In September 2025, Fannie Mae forecast rates of 5.9% for the end of 2026; a year later, rates were above 7%. Use forecasts as a guide, not a plan.
What is the best time to get a mortgage?
The best time is usually when you are financially ready and find the right home, rather than when you think rates have hit their lowest point. You can often refinance later if rates fall significantly.
The Bottom Line
Mortgage rates have risen in 2026, with the 30 year fixed average reaching 7.03% in late September as inflation, a Fed rate increase and higher Treasury yields push borrowing costs up. The major forecasters now expect rates of around 6.5% to 6.8% by the end of 2026 and similar levels in 2027, which means only modest relief at best.
Rather than trying to time the market, focus on what you can control: your credit score, your down payment, your budget and comparing offers from several lenders.
Disclaimer: This article is for general educational purposes only and does not constitute financial advice. Forecasts are from third party organizations, including Fannie Mae, the Mortgage Bankers Association and Realtor.com, and may change without notice. Mortgage rates depend on market conditions and your personal circumstances. Always get personalized quotes from licensed lenders.