30-year fixed mortgage rate forecast in the U.S. 2026 | Statista (2024)

FAQs

30-year fixed mortgage rate forecast in the U.S. 2026 | Statista? ›

The 10-year treasury constant maturity rate in the U.S. is forecast to decline by 0.8 percent by 2026, while the 30-year fixed mortgage rate is expected to fall by 1.6 percent. From seven percent in the third quarter of 2023, the average 30-year mortgage rate is projected to reach 5.4 percent in 2026.

For the end of 2026, the median dot now shows a target range of 3% to 3.25%, versus 2.75% to 3% three months ago. And officials' median longer-run estimate was for a target range of 2.5% to 2.75%, also a quarter of a percentage point higher than in December.

Looking beyond that, Freddie Mac's researchers said that they expect mortgage rates to decline even further in 2025, dropping below 6.5% on average. They believe this will further stimulate the real estate market by making homeownership more affordable for more Americans.

Will mortgage rates come down in the next 5 years? Lord: “For the rest of 2023, I predict rates for the 30-year fixed-rate mortgage will average 7.3%, followed by 6.1% in 2024, 5.5% in 2025, 5% in 2026, 4.5% in 2027, and 4.5% in 2028.

Projected Interest Rates In The Next Five Years

ING's interest rate predictions indicate 2024 rates starting at 4%, with subsequent cuts to 3.75% in the second quarter. Then, 3.5% in the third, and 3.25% in the final quarter of 2024. In 2025, ING predicts a further decline to 3%.

The 10-year treasury constant maturity rate in the U.S. is forecast to decline by 0.8 percent by 2026, while the 30-year fixed mortgage rate is expected to fall by 1.6 percent. From seven percent in the third quarter of 2023, the average 30-year mortgage rate is projected to reach 5.4 percent in 2026.

It's possible that rates will one day go back down to 3%, though if current trends hold that's not likely to happen anytime soon.

While 30-year mortgage rates moved down slightly in July, it's unlikely there'll be a meaningful drop beyond that if the economy continues its strong streak. Forecasters expect rates to land closer to mid-6 percent by the end of 2024, according to Bankrate's August mortgage rate outlook.

So if the Fed lowers its benchmark rate by 25 basis points, CD rates aren't guaranteed to fall from 5% to 4.75%. But all told, it's pretty fair to assume that there will still be opportunities to lock in a CD at close to 5% at the start of 2025.

The new normal for mortgage rates will be around 6%, says NAR's Lawrence Yun. Lawrence Yun, National Association of Realtors chief economist, joins 'Squawk Box' to discuss the state of the housing sector, whether housing prices have stabilized, mortgage rate trend outlook, and more.

Should I lock my mortgage rate today? ›

Locking in early can help you get what you were budgeting for from the start. As long as you close before your rate lock expires, any increase in rates won't affect you. The ideal time to lock your mortgage rate is when interest rates are at their lowest, but this is hard to predict — even for the experts.

This practice is often referred to as “buying down the interest rate” or a “buydown.” Each point the borrower buys costs 1 percent of the mortgage amount. One point on a $400,000 mortgage would cost $4,000, for example. In effect, mortgage points are a type of prepaid interest.

As of Aug. 5, 2024, the average 30-year fixed mortgage rate is 6.35%, 20-year fixed mortgage rate is 6.07%, 15-year fixed mortgage rate is 5.42%, and 10-year fixed mortgage rate is 5.36%. Average rates for other loan types include 6.18% for an FHA 30-year fixed mortgage and 6.67% for a jumbo 30-year fixed mortgage.

While 2026 is expected to be on a par with 2025, at 1.0%. The interest rate peaked at 5.25% in 2023 and is expected to be cut to 4.75% by the end of 2024. It is expected to be cut to 4.35% by the end of 2025 and then to 3.95% at the end of 2026.

Fannie Mae and the Mortgage Bankers Association predict that the 30-year mortgage rate will fall through the first half of 2025. Fannie Mae predicts it will average 6.5% in the second quarter of 2025 and the MBA predicts it will average 6.3%.

As of April 2024, the prime rate charged by U.S. banks was 8.5 percent - a sharp increase compared to a year before that, when the rate charged was about 6.25 percent. The prime rate is a benchmark interest rate used by banks for various loan products, such as credit cards and personal loans.

As of the Summary of Economic Projections on June 12, most policymakers anticipated one or two interest rate cuts in 2024. A minority of FOMC members projected rates would not change in 2024 from their current 5.25% to 5.5% range.

The CME FedWatch Tool shows that there is a high likelihood that the Fed could start cutting rates as soon as September. Ultimately, average savings rates will also likely begin to drop more toward the end of 2024, with some individual banks deciding to decrease rates more quickly than others.

In its June Mortgage Finance Forecast, the Mortgage Bankers Association predicts that mortgage rates will fall from 7% in the second quarter of 2024 to 6.6% by the fourth quarter. The industry group expects rates will fall to 6% at the end of 2025 and will average 5.8% in 2026.

At present, markets are pricing in one further rate cut in 2024. If forecasts are correct, this could mean base rate will fall to 4.75 per cent by the end of 2024.