2026 Mortgage Rate Forecast

If you’ve been thinking about buying a home, you’ve probably noticed a lot of buzz around declining mortgage rates—and for good reason. After nearly a year of steady rates, the Federal Reserve made two rate cuts this fall, helping push mortgage rates to their lowest levels in three years. On December 10th, 2025, the Fed cut rates by another quarter point, bringing the target range for federal funds rate to 3.50%-3.75%.

These changes have many potential home buyers wondering what’s next. While no one can predict the market, some industry professionals expect rates to drift slightly lower in 2026. “Many experts say rates could drop slightly in 2026,” according to CBS News. “If that happens, it could cause a spike in homebuying demand, which could send home prices up, too.”

Whether you’re ready to find your first home or looking to refinance, you may be wondering: Is now the right time, or should I keep waiting? In this article, we’ll answer some of the important mortgage questions on everyone’s mind to help you make your next move with confidence.

Should I Wait to Buy a Home?

Deciding whether to buy now or wait? Consider your current and future needs, today’s mortgage rate environment, and the costs associated with delaying purchasing a home. Rent payments tend to rise over time, in some cases even rising faster than home values. Rising property values may result in you paying more for the same home at a later date. You may also lose out on equity gains by delaying your home purchase, even small annual price gains can add up significantly over time.

Besides the cost of waiting to buy a home, there are also benefits of buying now. One of the biggest historical benefits to home ownership is building equity—which can be used for home improvements, debt consolidation and other financial goals. There are a variety of programs available, like a Home Equity Line of Credit (HELOC), Home Equity Loan (HELOAN), and Cash-Out Refinance, that can help you maximize your home equity.

Owning a home offers you the ability for your living space to grow with you. This flexibility can support your lifestyle today and your plans for the future in ways renting cannot.

When Is the Best Time to Buy?

Many potential homebuyers are asking this question in today’s market. While high mortgage rates can make home buyers wary of purchasing, there are also some advantages. When rates were at record lows, demand surged, leading to increased home prices and bidding wars. With higher rates, less competition for homes can help you avoid costly bidding wars and also provide you the opportunity to negotiate concessions from the seller. If you are looking for a new home, many new home builders are offering programs like closing cost assistance, temporary buydowns, and more.

While interest rates may be higher than you’d prefer, the rate you purchase your home at doesn’t always have to be the rate you keep long term. Many homeowners explore refinancing if interest rates drop in the future.  Refinancing options may vary, however, and are subject to market conditions, loan programs and individual eligibility, as well as closing costs

What’s Next for Mortgage Rates?

Following the Fed’s third rate cut of 2025, mortgage rates have eased to their lowest point in three years. Most forecasts point to a slight decline in rates through the first half of 2026. However, market volatility remains possible—changes to inflation, job growth, and the Fed’s rate cut decisions and outlook can impact overall rates. For homebuyers, that means that some opportunities may appear unexpectedly. Locking in lower rates when available can help make a difference in your monthly payments.

If rates continue to decline, more buyers may enter the homebuying market, increasing competition and potentially driving up home prices. For those intent on making a move, it’s a good idea to speak with a licensed loan originator and stay informed on market trends.

Can I Lock My Mortgage Rate?

While mortgage rates have remained relatively steady, the market can still shift unexpectedly. A mortgage rate lock can help you protect your budget during the buying process. Rate locks are made between you and your lender, guaranteeing a specific interest rate—even if the market goes up—over a set period of time. This protection can help give borrowers peace of mind, with most rate locks lasting between 15 and 60 days.

What Happens If Mortgage Rates Go Down?

Lower mortgage rates can benefit homeowners, homebuyers, and home sellers. Homeowners may have the opportunity to refinance their existing mortgages, helping to reduce monthly payments, shorten loan terms, or even tap into home equity. Homebuyers may also qualify for a higher loan amount, taking advantage of extra purchasing power and lower payments to purchase their dream home. For home sellers, lower rates can help strengthen buyer demand, increasing competition and sales prices.

What If Rates Go Down After I Lock My Mortgage Rate?

Think rates might drop again? A rate float down option allows you to take advantage of a lower interest rate if rates go down before you close. This helps give buyers flexibility and peace of mind if the market shifts during the buying process. Lenders typically have guidelines on how this works, so be sure to talk with a licensed loan originator to learn more.

Mortgage Rate Forecast for 2026

With the information above, you’ll be better equipped to navigate the potential market changes ahead in the New Year. While future interest rates and housing trends cannot be guaranteed or predicted, having a clear understanding of your available options can help you make decisions that best align with your goals.

Homeownership is more than a transaction, it’s a long-term investment in stability, wealth building, and a place to call your own. Even in an evolving market, it remains one of the most meaningful financial steps you can take. Staying informed and evaluating different loan scenarios can help you approach the market with confidence and clarity, keeping you prepared for whatever opportunities may arise.

Is 2026 the year you buy a property? Explore Acrisure Mortgage solutions now.

^{This content is provided for general educational and informational purposes only and is not intended as financial, investment, or mortgage advice. Mortgage rates, market conditions, and loan programs are subject to change without notice and cannot be predicted or guaranteed. Any loan products, terms, or features referenced are subject to lender guidelines, program availability, and borrower eligibility. This is not a commitment to lend.}