2026 Mortgage Interest Rates May SURPRISE You

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What Will Happen to Mortgage Interest Rates in 2026?

If you're a homebuyer—or thinking about refinancing—you've likely been watching mortgage rates like a hawk. Will they drop back into the 5s? Will they hover around 6%? Or are we destined to see rates spike again?

In this episode of The Educated Home Buyer, Jeb Smith and Josh Lewis unpack everything you need to know about where mortgage interest rates may be heading in 2026. They challenge the big forecasts, review expert insights (including Barry Habib and Logan Mohtashami), and break down how tariffs, inflation, and the Fed are influencing rates right now.

Whether you're buying your first home or planning to refinance, understanding where rates are heading in the next 12 to 24 months could save you thousands.

Current Mortgage Rate Snapshot (Late 2025)

• 6.25% — for high-credit, low-LTV conventional borrowers
• 5.75%–6.00% — for some government loans
• 5.625% — possible with some paid points or lender credits

This range is significantly lower than the 7.25% peak we saw just 12 months ago—but it's still higher than the ultra-low rates many homeowners grew used to during the pandemic.

Understanding What’s Driving Mortgage Rates

1. Inflation Trends Are Shifting

• Tariffs: One-time price increases are propping up inflation.
• Job Data Errors: Misreporting caused temporary rate spikes.

2. The Fed Is Pivoting (Quietly)

• Hints of a softer stance
• End of quantitative tightening
• Labor market weakness acknowledged

3. Government Deficits & Treasury Supply

More Treasury supply pushes yields higher, competing with mortgage-backed securities and nudging mortgage rates up.

Where Do Experts Think Rates Are Headed in 2026?

1. Mortgage Bankers Association (MBA)

• Prediction: 6% to 6.5%
• Outlook: Sticky inflation and deficits keep rates elevated

2. Fannie Mae

• Prediction: ~6.4%
• Outlook: Cautious and higher than current market

3. Barry Habib (MBS Highway)

• Prediction: 5.5% to 5.75%
• Outlook: Tariffs fading, shelter inflation dropping

4. Logan Mohtashami (HousingWire)

• Prediction: 5.75% to 7.25%
• Outlook: Based on 10-year Treasury trend

5. Lawrence Yun (NAR)

• Prediction: ~6%
• Outlook: The "new normal" for now

Rate Volatility: What the Last 18 Months Taught Us

Mortgage rates can change quickly. We've seen swings from 7.25% to 5.625% in less than a year. Don't try to time the bottom—take advantage when a good opportunity presents itself.

What Triggers Lower Mortgage Rates?

• Lower Inflation (tariffs fading, shelter costs falling)
• Fed Easing (ending QT, potential rate cuts)
• Narrowing MBS Spreads (more typical 10-year/mortgage spread)

But What Could Keep Rates HIGHER?

• Unexpected inflation spikes
• Labor market resilience
• Even higher federal borrowing

What Should You Do as a Buyer or Homeowner?

If You're Looking to Buy

• Get pre-approved now
• Lock a rate that fits your budget
• Refi later if rates drop further

If You're Looking to Refinance

• Don’t wait too long
• If you can save now, do it
• Use Josh & Jeb’s Refi Watch List

Quick Recap: Expert Forecast Ranges for 2026

Final Thoughts

Inflation is cooling. The Fed is shifting. Buyer demand is returning.

We may not revisit the pandemic lows of 3%, but a 5.5% rate in 2026 is definitely on the table.

Click here to get started now and explore your options before the next rate move.