Mortgage rates have stayed within a narrow range heading into 2026. The 30-year fixed mortgage rate has fluctuated within 11 basis points of its 2025 low since October 23. Freddie Mac reports the national average 30-year rate is now 6.16%.
Rates have generally declined since late May, with small weekly movements but more noticeable longer-term changes. They remain just above 6%. As of January 8, the average 30-year fixed-rate mortgage is one basis point above its 2025 low of 6.15%. It is 77 basis points lower than this time last year. Entering 2025, mortgage rates averaged 6.931%.
The average 15-year fixed mortgage rate this week is 5.46%, 68 basis points lower than last year. Current rates on both 30-year and 15-year fixed-rate mortgages are slightly above their 2025 lows.
Freddie Mac data for the past 52 weeks as of December 31, 2025, shows the 30-year fixed-rate mortgage ranged from 6.15% to 7.04%. The 15-year fixed-rate mortgage ranged from 5.41% to 6.27%.
President Trump has proposed unfreezing mortgage rates from above 6%. He is urging Fannie Mae and Freddie Mac to purchase billions in mortgage bonds to tighten the spread between mortgage rates and 10-year Treasurys.
"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," said Realtor.com senior economist Jake Krimmel.
The Federal Reserve lowered the fed funds rate three times in 2025. At its September meeting, it voted to cut by 25 basis points, followed by second and third cuts in October and December.
Mortgage rates typically follow fed funds rate trends. When people anticipate a cut, rates often fall before meetings but may not continue decreasing afterward. In 2024, rates dropped ahead of the September meeting but stabilized after cuts. Similar patterns occurred in 2025.
The Fed has indicated one rate cut planned for 2026. Due to factors including public sentiment, rates may not fall drastically next year.
Mortgage rates closely follow the 10-year Treasury yield, which closed at 4.18% on January 8, down from 4.77% a year prior. Lenders add a spread to this yield. The current spread for the 30-year fixed rate is 1.98%, smaller than last year's 2.25%, contributing to lower rates.
The median sale price of single-family homes has risen from $208,400 in Q1 2009 to $410,800 by Q2 2025, according to Federal Reserve Bank of St. Louis data. Buyers outnumber available homes, especially in first-time buyer price ranges, keeping prices high.
Even during a recession, lower interest rates could increase buyer demand, maintaining pressure on limited housing supply. Buyers need both interest rates and home prices to drop for significant savings. Rates are inching down, and prices are stagnant or lowering in some areas.