Mortgage rates to barely budge in 2026, say three major U.S. listings platforms
Mortgage rate predictions are notoriously tricky, with numerous factors influencing the cost of borrowing money to finance a home purchase or refinance an existing home loan.
Where interest rates for short-term revolving debt (like credit cards) are directly linked to changes in the Federal Reserve’s overnight lending rate for banks, mortgage rates are benchmarked to yields on 10-year U.S. Treasury bonds, longer-duration securities that fluctuate according to investor attitudes toward broader economic stability and inflation.
In the affordability-constrained sales environment of the U.S. housing market over past three years, even slight increases or decreases in mortgage rates have driven loan production, making the difference between contracts signed and contracts canceled.
After beginning 2025 around 7%, average fixed rates for 30-year mortgages hovered between 6.2% and 6.3% as of late November, according to indexes maintained by the Mortgage Bankers Association and government-sponsored enterprise Freddie Mac.
Zillow: ‘More breathing room’
Releasing the listing platform’s official housing market outlook for 2026, economists at Zillow described attempts to predict year-ahead mortgage rates as “about as difficult as predicting next year’s weather forecast.”
Casting their lots nonetheless, Zillow experts predict mortgage rates will remain above 6% in 2026, contributing to a modest 4.3% growth in existing-home sales next year to an annual pace of around 4.26 million units.
Pent-up demand meeting improved affordability will drive annual home price appreciation of 1.2%, much lower than the double-digit gains of recent years, Zillow forecasts.
The company did not include an inventory prediction for next year but expects new-home construction to slip to its lowest levels since 2019 as builders delay new projects due to their large volume of standing unsold inventory and units still under construction.
“Buyers are benefiting from more inventory and improved affordability, while sellers are seeing price stability and more consistent demand,” said Mischa Fisher, chief economist at Zillow. “Each group should have a bit more breathing room in 2026.”
Redfin: ‘Great Housing Reset’ coming
Redfin economists predict next year will introduce what they call the “Great Housing Reset” — a yearslong trend toward “gradual increases in home sales and normalization of prices as affordability gradually improves.”
Forecasting national home price growth of just 1% next year, the company believes incomes will rise faster than home prices “for a prolonged period” for the first time since the aftermath of the 2008 financial crisis.
Improved affordability is unlikely to materialize overnight, however, and “homebuying will remain out of reach for a lot of sidelined buyers.” Slight improvements in affordability will help existing-home sales rise by around 3% to 4.2 million sales next year, still near 2024’s three-decade lows of 4.06 million sales.
Redfin forecasts mortgage rates will spend 2026 in the low-6% range, averaging 6.3% for the year as stubborn inflation risks prevent the Federal Reserve from rapidly reducing borrowing costs in the broader economy.
“That’s why rates may dip below 6% occasionally, but not for any meaningful period,” the economists wrote. Still, those dips could drive a 30% increase in refinance loan volumes in 2026 of up to $670 billion.
Realtor.com: A ‘meaningful shift’
Listings platform Realtor.com has presented a more bearish outlook for 2026, with the annual pace of existing-home sales only rising by about 1.7% to 4.13 million units.
Mortgage rates are forecast to stay around 6.3% through 2026, says Realtor.com, and national home prices will rise 2.2%, a touch stronger than Zillow and Redfin predict.
Still, Realtor.com Chief Economist Danielle Hale expects the overall housing market to trend alongside the other companies’ predictions of gradually improved affordability.
“It’s not a dramatic reset, but it’s a meaningful shift that moves the market back toward balance,” said Hale.
A rise in active listings to within 12% of pre-2020 levels will help strike that balance, easing upward home price pressures and shifting more market power toward buyers, says Realtor.com, which expects the typical monthly mortgage payment for a median-priced home to fall by 1.3% in 2026.