Mortgage Rates to Drop Below 6% by End of 2026
Fannie Mae projects mortgage rates to fall to 6.4% by late 2025 and 5.9% in 2026, with rising home sales and mortgage originations over the same period.
WASHINGTON — Mortgage rates are forecast to end 2025 and 2026 at 6.4% and 5.9%, respectively, according to the September 2025 Economic and Housing Outlook from the Fannie Mae Economic and Strategic Research (ESR) Group.
The ESR Group projects new and existing home sales to total 4.72 million in 2025 and 5.16 million in 2026. Single-family mortgage originations activity is expected to total $1.85 trillion in 2025 and $2.32 trillion in 2026, with the refinance share rising from 26% in 2025 to 35% in 2026 on the lower mortgage rate outlook.
About the ESR Group: Fannie Mae's Economic and Strategic Research Group, led by Chief Economist Mark Palim, studies current data, analyzes historical and emerging trends, and conducts surveys of consumers and mortgage lenders to inform forecasts and analyses on the economy, housing, and mortgage markets.
Source: Fannie Mae
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