Will Interest Rates Go Down in 2026? Expert Insights by Greg Makos

Hi, I’m Greg Makos, Mortgage Loan Originator with Trident Home Loans.
Over the years, I’ve helped countless homeowners understand how national rate shifts translate into real-world mortgage decisions. As we move into 2026, one question dominates the housing conversation: will interest rates finally go down?

Below I’ll share my professional outlook on where mortgage and interest rates may be headed from year-end 2025 into 2026 — and what that could mean for buyers, refinancers, and current homeowners.

Long-Term Market Outlook/Housing Market Trends and Inflation

Forecasting rates is always tricky, but several economic signals point toward a gradual cool-down rather than a rapid drop.

• Inflation: After two years of aggressive Federal Reserve hikes, inflation is trending closer to the Fed’s 2 % target.

• GDP growth: Slower but steady, suggesting the economy may enter a “soft landing.”

• Labor market: Still resilient, which prevents rates from plunging too fast.

The housing market remains tight — low inventory and strong buyer demand are keeping prices firm — but affordability pressure is pushing some sellers to adjust.
That balance could create mild downward pressure on mortgage rates. As inflation cools, bond yields follow — and mortgage rates often track the 10-year Treasury yield.

If these trends continue, interest rates in 2026 could settle near 5 – 5.5 %, lower than 2024 levels but still above the record lows of 2020–2021.

Refinance Opportunities

For homeowners who locked their mortgage above 7 %, even a half-point reduction can mean hundreds saved per month.
→ Explore your options here: https://tridenthomeloans.com/greg-makos/

When rates dip, refinance activity spikes, especially through programs like:

• VA IRRRL (Interest Rate Reduction Refinance Loan)

• FHA Streamline Refinance

• Conventional rate-and-term refinances

Homeowners who monitor the market with their MLO can time these windows effectively.

Economic Indicators to Watch

1. Federal Reserve policy – each meeting can sway investor sentiment.

2. CPI and PCE reports – lower inflation = lower yields.

3. Global events – oil prices, geopolitical risks, supply-chain issues.

4. Housing starts & inventory – tight supply supports pricing but caps rate drops.

If inflation stays moderate and the Fed eases policy, mortgage rates could average 5.75 – 6.25 % by mid-2026.

(Forecasts compiled from MBA, Freddie Mac, and Fannie Mae outlooks.)

Expert Predictions for Homebuyers

Most analysts agree we’re entering a gradual normalization phase.
That means rates are unlikely to crash — but they’ll trend lower step by step as inflation pressure fades.

If you’re planning to buy, it’s wise to watch Federal Reserve announcements and bond-market reactions.
→ Check loan program options: https://tridenthomeloans.com/loan-options/

Should You Wait or Buy Now?

This is one of the most common questions I hear as an MLO.
Here’s my honest answer: buying decisions shouldn’t hinge solely on interest rates.

Even if rates fall in 2026, rising home values may offset the savings.
If you find a property that fits your budget today, you can always refinance later when conditions improve.

Working closely with a mortgage professional helps you structure the right path — and that’s where our team at Trident Home Loans comes in.

1. Will mortgage rates ever go back to 3 %?

Unlikely. Those record lows were driven by pandemic-era stimulus. Future rates near 5 % would already be considered very favorable.

2. Is now a good time to refinance?

If your rate is 7 % or higher and you plan to stay in your home for 3+ years, exploring a refinance may make sense.
→ https://tridenthomeloans.com/greg-makos/

3. What will drive mortgage rates lower again?

Primarily sustained declines in core inflation and signals from the Federal Reserve that tightening is complete.

4. Should first-time buyers wait until late 2026? 

Waiting is risky if home prices keep rising. Even with slightly higher rates today, building equity earlier often wins long term.