Mortgage Rates Fall—and Could See Another Cut Before 2026

By Giulia Carbonaro

Senior Housing Reporter

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Mortgage rates have fallen to 6.23 percent ahead of another expected cut by the Federal Reserve in December, slightly improving housing affordability for millions of Americans.

“The Freddie Mac 30-year fixed mortgage rate edged down 3 basis points this week, to 6.23 percent, as delayed economic data trickles in and a divided Fed leans toward a December cut,” Realtor.com senior economist Jake Krimmel said in a statement shared with Newsweek.

“After the delayed September jobs report delivered mixed signals, several Fed key officials hinted they would back another rate cut, even despite some likely dissent on the committee.”

Why Are Mortgage Rates Sliding Now?

The average 30-year fixed-rate mortgage, the most popular home loan among Americans, was down to 6.23 percent as of November 26 from 6.26 a week earlier, according to Freddie Mac.

While the decline might appear minimal, the average 30-year fixed-rate mortgage is now more than 50 basis points, or 0.5 percent, lower than the same time a year ago.

The recent declines in mortgage rates, which have started in late summer ahead of the Federal Reserve’s first cut since December 2024, are largely linked to observers’ expectations of what the central bank will do.

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While the Federal Reserve has appeared divided over whether to further cut interest rates or not, top officials at the central bank have recently signaled that sentiment has shifted in favor of another cut in December.

JP Morgan said on Wednesday that it expects the Federal Reserve to deliver a 25-basis-point rate cut next month.

“While the next FOMC [Federal Open Market Committee] meeting remains a close call, we now believe the latest round of Fedspeak tilts the odds toward the committee deciding to cut rates in two weeks from today,” said J.P. Morgan’s chief U.S. economist Michael Feroli in a note. “We’re back to looking for a final cut in January.”

Will They Continue Falling?

“We are entering the traditionally slowest period for the housing market. Monthly home sales are lowest in November, December and January. Listing activity slows down during the winter as prospective sellers set their sights on early spring,” Bright MLS chief economist Lisa Sturtevant said in a statement shared with Newsweek.

A lot of what mortgage rates will do in the coming months depends on whether the Federal Reserve will introduce further cuts. For now, a majority of experts expect a December cut to be in the cards.

“A further cut, which traders think will happen with 80 percent probability, could bring mortgage rates near 2025-lows just as the year comes to a close,” Krimmel said.

“This would give homebuyers something to be thankful for heading into 2026, while potentially buoying a housing market which has seen some light tailwinds of late,” he added. “Pending home sales picked up 1.9 percent in October; existing home sales have notched four straight months of annual growth; and builders have begun to offer more competitive pricing and financing.”

According to Krimmel, “with the fall home-buying season winding down after Thanksgiving, all eyes will turn back to the Fed and the eventual release of backlogged government data.”

Much of what the Federal Reserve would do will depend, in turn, on the inflation and labor market outlook, he said.

“If inflation cools, the labor market rallies, and the Fed delivers another cut, the housing market could enter 2026 with real momentum,” Krimmel said.

“Mortgage rates, which hit a 13-month low earlier this fall, likely will stay in the tight range they have been in for the past several weeks,” Sturtevant said.

“It is looking increasingly likely that the Fed will cut interest rates when it meets on December 10. However, we should not expect that to translate into a big drop in mortgage rates.”

Melissa Cohn, regional vice president of William Raveis Mortgage and a 43-year mortgage industry veteran, is equally doubtful of an incoming cut by the Federal Reserve. The central bank has “always impressed upon everyone that they like to rely upon factual data for their decision making,” she said in a statement shared with Newsweek.

“If there’s very little data to be presented with, they may find themselves better off waiting until the next meeting, when there’s more data for them to make the right decision.”

Sturtevant said, “we are in a ‘wait-and-see' housing market as we head into 2026. There are both buyers and sellers on the sidelines, watching not just where mortgage rates and the economy are headed, but also how confident they feel about their own personal situations.”

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