economy
January 20, 2026
Will mortgage rates drop below 5% in 2026? Here's what experts say.
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TL;DR
- Mortgage rates have declined over the past year, reaching their lowest point in over three years.
- Securing rates under 6% is currently possible for qualified borrowers.
- A drop below 5% would require inflation to decrease to pre-COVID levels, a weaker labor market, and slower economic growth.
- Potential purchases of mortgage-backed securities by President Trump could push rates lower.
- Factors that could prevent rates from dropping below 5% include sticky inflation, resilient economic growth, or large-scale government borrowing.
- Industry forecasts predict year-end rates around 6% or 6.4%.
- Adjustable-rate mortgages (ARMs) and shorter-term loans (like 15-year loans) can offer lower interest rates.
- Shopping around with multiple lenders or using a mortgage broker can help secure better rates.
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