Rate Trends You Need to Know

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Where Mortgage Rates Are Predicted to Go in 2025 and 2026

If you’re shopping for a house, it’s hard to decide the right time to make the leap and lock in a mortgage rate. Is this a good month, or should you wait until later this year? Or maybe it’s smarter to hold off even longer, waiting to purchase until 2026?

Unfortunately, mortgage rates are notoriously hard to predict. That’s because they’re influenced by an intricate web of economic factors, including inflation, housing data, and most importantly, the bond market. And while the Federal Reserve’s benchmark interest rate directly affects what you can earn on your savings or what you’ll pay on credit card debt, it has only a tangential effect on mortgage rates.

However, forecasts for future mortgage rates abound, coming from sources like government-backed Fannie Mae, industry groups like the Mortgage Bankers Association and the National Association of Home Builders, and mortgage analytics firms like Curinos. Here is what they are forecasting right now for the end of this year and next. As you can see in the table below, they expect rates to stay in 6% territory for the foreseeable future.

A Fed Rate Cut Won’t Necessarily Lower Mortgage Rates

If you’re waiting to buy a house until after the Federal Reserve decides to lower its benchmark interest rate, you may want to reconsider. While financial markets are pricing in the likelihood that a rate reduction will arrive in September, with possibly another cut later in 2025, there is no guarantee the Fed will cut the federal funds rate this year. And with economic uncertainty running high due to President Donald Trump’s evolving tariff policy, it’s not a sure bet we’ll see a Fed rate cut in the coming months.

Perhaps more important, though, is that while the federal funds rate can influence factors that, in turn, affect mortgage rates, the Fed’s moves do not directly impact mortgage rates. It’s even possible for them to move in opposite directions. This occurred late last year, when the central bank lowered its benchmark rate a full percentage point between September and December while mortgage rates surged 1.25 percentage points by mid-January.

So while one or more Fed rate cuts could put downward pressure on mortgage rates, there’s no guarantee, and it’s not something to count on.

Timing Advice for Current Home Buyers

Mortgage rates have recently moved lower, falling to their lowest levels since the early days of April. Though the 30-year mortgage average has ticked up a few points this week, to 6.79%, that’s not much more than the 6.75% low we saw last week, which was the cheapest level in almost three months.

“My advice is to buy if you find the right house, as inventory has increased relative to last year and feels as though we have shifted to a buyer’s market. And on the rate side, we’re only expecting nominal improvement through the remainder of this year,” said Rich Martin, director of Real Estate Lending Solutions at Curinos.

If you’re shopping for a newly constructed home, Martin added that you may have even more reason to buy now rather than later. “Expect new construction prices to go higher due to the impact of tariffs and the relative cost of construction. In addition, the Trump administration’s immigration rhetoric may contribute to a lack of skilled laborers, thus adding increased cost pressures on home building.”

Of course, even if you lock in a mortgage rate this year, that doesn’t mean you’re stuck with it for the full term of the loan. You can always refinance later if rates decrease. “There’s a strong likelihood to refi later in 2026 or 2027, as I do expect longer-term rates to move lower,” said Martin.

How We Track the Best Mortgage Rates

The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant credit score in the range of 680–739. The resulting rates represent what borrowers should expect when receiving quotes from lenders based on their qualifications, which may vary from advertised teaser rates. © Zillow, Inc., 2025. Use is subject to the Zillow Terms of Use.