Fannie Mae Expects 30-Year Fixed Mortgage Rates Below 6% in 2026

Fannie Mae's latest forecast predicts the 30-year fixed mortgage rate will decrease to below 6% by the end of 2026, specifically targeting 5.9%, down from their previous estimate of 6.1%. Despite a recent Federal Reserve rate cut, mortgage rates have actually risen slightly in 2025 due to market reactions to inflation and Treasury yields, with the average 30-year fixed mortgage rate currently around 6.53%. Fannie Mae also revised down its home sales projections for 2025 and 2026, expecting 4.72 million and 5.16 million total home sales respectively, reflecting a cautious housing market outlook. Mortgage originations are forecasted to increase but still remain below past peaks, with refinance shares expected to rise as rates decline in 2026. Meanwhile, certain housing markets like Florida are experiencing a buyer-friendly shift with increased inventory, longer market times, and price reductions, offering negotiating leverage for buyers despite steady mortgage rates. Overall, while mortgage rates are expected to gradually decline next year, current economic factors and inflation concerns continue to keep rates elevated in the near term.