Mortgage rates have recently started to stabilize, which is generally good news for people who want to buy homes. Since the beginning of 2025, the 30-year mortgage rate fell from 7.04% to 6.27% by mid-October, according to data from Freddie Mac.
The Fed is set to meet two more times before the end of the year, which could mean lower mortgage rates. Some mortgage specialists are predicting rates will stay at around the mid-6s, while others say the rates could drop below 6% in 2026.
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Economists from the Mortgage Bankers Association (MBA) are warning that there are still challenges ahead with tariffs and inflation, the National Mortgage Professional reports. Because of these challenges, mortgage rates might stay higher than 6%. As a result, many potential homebuyers may delay buying a home because higher mortgage rates make monthly payments more expensive.
Experts predict mixed outlooks for 2026
Barry Habib, CEO of MBS Highway, a company that offers data and tools for mortgage and real estate professionals, spoke at the National Association of Mortgage Brokers (NAMB) event in Las Vegas, predicting mortgage rates will fall below 6% next year.
“I think you’re in for mortgage rates around 5.75%, maybe 5.5%, in that range,” Habib said as reported by Mortgage Professional America.
Habib believes true inflation is closer to the Fed’s target of 2%, rather than the higher numbers being reported. He is predicting that the Fed will cut rates twice more in 2025 –– once at each of its final two meetings of the year in October and December.
“We are going to get another cut coming up at the end of this month. We’re likely going to get another one Dec. 10,” Habib said. “I think the Fed funds rate by the end of this year gets to 3.625%. And then we’re going to see further cuts coming in 2026, so it will come down further in 2026.”
On the other hand, Mike Fratantoni, the chief economist of the MBA, also spoke at the same conference in Las Vegas and predicted the Fed will cut rates twice more this year. However, he predicts that 30-year fixed mortgage rates will stay between 6% and 6.5% for the next few years, specifically through the end of 2028, Realtor.com reports.
“As we move over the next couple of years, we think it’s more likely that long [term] rates are going to go up rather than down, given the fiscal pressures on the economy,” Fratantoni said at the conference.
Fratantoni said he’s only expecting the Fed to cut rates once in 2026. However, he’s expecting occasional short-term drops in rates that could lead to refinance opportunities.
Upcoming Fed decisions uncertain amid government shutdown
The Fed is poised to meet next week and decide on interest rates. However, because the U.S. government is shut down, the Fed doesn’t have the usual economic data to base its decision on.
During a government shutdown, certain federal agencies stop publishing economic data like job reports, inflation data and consumer spending. This means the Fed is missing key information it normally uses to guide its decisions.
