What Mortgage Rates Are Forecasted to Be in 2026 (And What That Means for Buyers)

What Mortgage Rates Are Forecasted to Be in 2026 (And What That Means for Buyers)

Mortgage rates have been one of the biggest question marks for buyers and sellers over the past few years. After the volatility we’ve seen since 2022, many people are asking the same question as we head into a new year:

Where are mortgage rates actually going in 2026?

While no one has a crystal ball, we now have one of the most comprehensive collections of forecasts from leading housing economists, banks, and real estate institutions—and the takeaway is clearer than it’s been in a while.

The 2026 Consensus: Low 6% Range

According to an average of projections from nearly 20 major forecasters, the 30-year fixed mortgage rate is expected to average around 6.18% in 2026.

That may not sound dramatic—but after years of rapid rate swings, stability itself is meaningful.

Here’s a snapshot of what top institutions are predicting:

• Higher-end forecasts:

  • Hunter Housing Economics: 6.60%

  • Capital Economics: 6.50%

• Middle of the pack:

  • MBA, PNC Bank: 6.40%

  • Realtor.com, Redfin, Compass: 6.30%

  • Moody’s Analytics: 6.23%

• Lower-end forecasts:

  • NAR, Miami Realtors: 6.00%

  • Morgan Stanley & Erdmann Housing Tracker: 5.75%

When you average them all together, rates hovering in the low-6% range becomes the most realistic expectation.

What This Really Means for Buyers

The key word economists are using is “incremental.”

Rather than a sharp drop in rates, 2026 is expected to bring:

• Gradual relief

• More predictability

• Fewer sudden spikes

In other words, we may not see a dramatic return to 3–4% rates—but we are likely moving into a more stable environment where buyers can plan with confidence instead of reacting to headlines.

It’s also important to remember:
👉 These forecasts represent annual averages, not highs or lows. Rates can (and likely will) fluctuate throughout the year, just as they always have.

What Could Push Rates Lower (or Higher)?

Mortgage rate forecasts remain highly sensitive to broader economic conditions. Rates could trend lower than expected if:

• The labor market weakens more than anticipated

• The economy slows

• Mortgage spreads normalize further

On the flip side, stronger-than-expected economic growth or inflation pressures could keep rates elevated longer.

This is why timing the market perfectly is nearly impossible—and why strategy matters more than speculation.

The Bigger Picture for Knoxville Buyers

Here’s what I’m seeing locally: many buyers are no longer waiting for the “perfect” rate. Instead, they’re:

• Negotiating smarter

• Taking advantage of seller incentives

• Planning to refinance if and when rates improve

In markets like Knoxville, where demand remains steady and inventory is still limited in desirable areas, waiting purely for rate drops can sometimes mean missing the right home altogether.

My Take

Mortgage rates in 2026 are expected to be more predictable, not dramatically lower. And while rates matter, they’re only one piece of the puzzle.

The right time to buy or sell isn’t based on forecasts alone—it’s based on your lifestyle, financial goals, and long-term plans.

If you want to talk through what these projections mean for your situation—or explore creative financing options that make sense in today’s market—I am always happy to help!

—
Karli Pritchard
Knoxville Real Estate Advisor