Good news for homebuyers might finally be on the way! According to Fannie Mae, mortgage rates could fall below 6% by the end of 2026 — something we haven’t seen since 2022.
Right now, mortgage rates for a 30-year fixed loan sit around 6.26%, which is already an 11-month low. But if Fannie Mae’s forecast is right, that number could dip to 5.9% next year.
Why is this such a big deal? Because for the past few years, high mortgage rates and sky-high home prices have made buying a house super hard for many Americans.
🏠 What’s Causing the Change?
Experts say rates are starting to fall as the Federal Reserve gets ready to cut interest rates for the first time since 2024. But not so fast — some signs suggest rates might rise again slightly before the year ends, possibly back up to 6.4%.
Mortgage rates usually follow the 10-year Treasury yield, which depends on how investors feel about inflation and the economy. That means upcoming reports about jobs and prices will be super important for predicting where rates go next.
“Inflation data and the Fed’s decisions will set the tone,”
📉 Will Lower Rates Fix the Housing Market?
Maybe not right away. Over 80% of U.S. homeowners already have a mortgage below 6%, so a small drop might not be enough to make them want to sell and buy again.
Still, Jones says that seeing rates “with a 5 in front” could be a psychological boost — it might make people feel like homebuying is possible again.
But here’s the reality: to make homes as affordable as they were a few years ago, something big would have to change. Fannie Mae says it would take one of these:
- Home prices dropping by 39% (ouch!)
- Household income rising by 60%
- Or mortgage rates falling all the way to 2.35% (unlikely anytime soon)
📊 Fannie Mae’s New Forecast
Because of affordability challenges, Fannie Mae lowered its home sales forecast for 2025 to 4.72 million, slightly less than expected. The number for 2026 is also down — now 5.16 million homes.
Still, there’s one bright spot: new home sales jumped 21% in August, reaching their highest level since early 2022. Builders may finally be getting a little more confident.
🧠 The Bottom Line
If rates drop below 6%, it could open new doors for buyers and bring more energy back into the housing market. But prices, wages, and inflation will still decide how “affordable” owning a home really is.
So — will mortgage rates finally hit 5% again? Maybe by late 2026. Stay tuned — the housing market’s next move could surprise everyone. Read Dallas Real Estate News: Historic Stoneleigh Hotel Getting a Major Makeover for 2026