Mortgage rates have stayed within a tight band as 2026 nears, with the 30-year fixed rate moving little since late October. Freddie Mac reports the national average at 6.16%, just above the 2025 low of 6.15% recorded on January 8. The rate is 77 basis points lower than a year ago.
Since May, rates have generally declined, though weekly shifts are minor. The 15-year fixed rate stands at 5.46%, down 68 basis points from last year. Data from Freddie Mac shows the 30-year rate ranged from 6.15% to 7.04% over the past 52 weeks, while the 15-year varied from 5.41% to 6.27%. Both are slightly above their 2025 lows.
President Trump has proposed a plan to reduce rates, urging Fannie Mae and Freddie Mac to purchase billions in mortgage bonds. This aims to narrow the spread between mortgage rates and 10-year Treasury yields. Jake Krimmel, a senior economist at Realtor.com, commented, "This could bring rates down in the short run by a small amount, but to really move mortgage markets, you would need large, sustained, and credible asset purchases."
The Federal Reserve cut the fed funds rate three times in 2025, with reductions in September, October, and December. Mortgage rates often fall ahead of such cuts but may not continue dropping afterward. In 2024, rates declined before the September meeting but stabilized post-cut. A similar pattern occurred in 2025. The Fed has signaled one rate cut for 2026, though public sentiment suggests rates may not fall sharply.
Mortgage rates closely track the 10-year Treasury yield, which closed at 4.18% on January 8, down from 4.77% a year ago. Lenders add a spread to this yield, currently 1.98% for the 30-year fixed rate, compared to 2.25% a year prior. The smaller spread contributes to lower mortgage rates now.
Experts caution against waiting for rates to drop further before buying a home. The housing market faces a supply crunch, with buyers outnumbering available homes, especially in affordable ranges. Median home prices have risen from $208,400 in early 2009 to $410,800 by mid-2025, according to the Federal Reserve Bank of St. Louis. Even in a recession, lower rates could boost demand, keeping prices high.
For buyers, strategies include purchasing within budget, exploring fixer-uppers with renovation loans, considering condos, or opting for 15-year mortgages. Rate buydowns can offer temporary relief. The Mortgage Bankers Association predicts the 30-year rate will stay around 6.4% in 2026, while Fannie Mae forecasts 5.9% by year-end.
Historical context shows 7% is not high compared to past decades, and 3% rates are possible only with assumable government-backed loans.