Anticipated Changes in Mortgage Rates: 2-Year Forecast for 2026 and 2027
The latest mortgage rate predictions for 2026 and 2027 indicate a general trend of gradual decline from the relatively high levels seen in 2025. Experts expect mortgage rates to decrease modestly in 2026, with Fannie Mae projecting the 30-year fixed mortgage rate to end 2026 at about 6.1%. The Mortgage Bankers Association (MBA) forecasts rates to stabilise around 6.3% by the close of 2026, while other sources anticipate rates settling in the mid-6% range by year-end 2026.
In 2027, mortgage rates are predicted to continue declining, potentially reaching historic lows. The 15-year mortgage rate forecast shows a steady downward trajectory, with rates potentially falling below 3% by the end of 2027. Monthly forecasts for 2027 suggest rates starting around 3.7% in January and dropping progressively to as low as 2.82% by December.
Key factors influencing these predictions include Federal Reserve policy, inflation, economic growth, global events, and housing market dynamics. The Fed's federal funds rate, currently around 4.25-4.50%, indirectly drives mortgage rates. Small rate cuts are expected in 2026 and 2027 if inflation continues to moderate towards the Fed’s 2% target.
Inflation rates are forecasted to decrease from about 3.1% in 2025 to 2.4% in 2026 and 2.1% in 2027. Elevated inflation tends to keep mortgage rates higher as the Fed tries to contain it; thus, moderating inflation supports rate declines. GDP growth is expected to be modest, about 1.4% in 2025 and 1.6% in 2026, suggesting a slowing economy that could prompt lower rates.
Global events, trade policies, and political tensions impact investor behaviour, influencing Treasury yields, which in turn affect mortgage rates. While rates may fall, rising home prices (forecasted to grow moderately by 1.3%-4% through 2027) and limited housing supply could offset some affordability gains from lower rates.
For prospective homebuyers, it is crucial to closely monitor economic data releases, particularly those related to inflation and employment, as well as statements and actions from the Federal Reserve. The anticipated decline in mortgage rates over the next two years could potentially bring 30-year fixed rates into the 5.5% to 6.0% range by late 2027.
Comparing offers from multiple lenders is essential to find the best rate. Norada helps investors identify turnkey real estate deals that deliver predictable returns, even when borrowing costs are high. If purchasing in the near term, be mindful of potential volatility and consider locking in a rate when you find one you are comfortable with.
[1] Fannie Mae Economic & Strategic Research (ESR) – June 2025 [2] Mortgage Bankers Association (MBA) – June 2025 [3] Freddie Mac Primary Mortgage Market Survey – July 2025
- As mortgage rate predictions for 2026 and 2027 indicate a gradual decline, investors may find opportunities in realestate financing.
- The analysis of market trends shows that the 30-year fixed mortgage rate could end 2026 at around 6.1%, with a potential drop to historic lows in 2027.
- Experts believe that investing in turnkey rental properties could be a good decision due to the anticipated growth in the mortgage market and potential declines in interest rates.
- In the news, there are discussions about Fed policy, inflation, and economic growth influencing the behavior of the mortgage market and borrowing costs.
- Prospective homebuyers should closely monitor mortgage news, economic data, and statements from the Federal Reserve to make informed decisions about their deals and investments.
- Comparing financing options and offers from multiple lenders is crucial for finding the best mortgage rates, as prices and yields in the economy are subject to change.
