Mortgage interest rates continued to ease through late 2025, reaching the low 6 percent range in September and staying near similar levels into early 2026. Forecasters expect slow, steady declines through the year. Fannie Mae projects further improvement by the end of 2026. Rates remain higher than the record lows of 2020 and 2021, yet they are still favorable compared to the long-term average of 7.8 percent.
Why Rates Are Falling
Rates are responding to easing inflation, a slower economy, and clear signals from the Federal Reserve that rate cuts are likely this year. These conditions have created a more affordable borrowing environment than buyers saw at the start of 2025.
What it Means for Buyers
Falling rates can help you secure a lower monthly payment, improve your buying power, and make more homes fit within your budget. Homeowners with older, higher-rate loans may also find refinancing worthwhile again.
Preparing Your Next Move
If you plan to buy or refinance, check your credit, set a firm budget, and get pre-approved. A Mike Thomas Associates agent can help you understand your options and move forward with confidence.