Mortgage rates steady as 2026 housing outlook brightens

"Rates have remained in a relatively narrow band for the past three months. They dropped below 6.5% in September, shortly before the Federal Reserve implemented the first of three straight 25-bps cuts. But they've yet to move below 6%, a place they haven't been since August 2022. The odds of the Fed continuing its rate-cutting campaign at the end of January are low, according to the CME Group's FedWatch tool."

"We think more houses are going to come on the market here soon, and as more come on the market and more buyers are eligible because of interest rates and opportunities it's going to be an amazing 2026 for the purchase side of the business, along with hopefully the refinance side, if rates drop a little bit more, Ishbia said in his monthly 3 Points video."

Mortgage rates have held in a narrow band for three months, falling below 6.5% in September after the Fed's first of three 25-basis-point cuts but not below 6% since August 2022. The CME Group's FedWatch shows low odds of further Fed cuts in late January, with 82% of traders expecting the funds rate to remain at 3.5%–3.75%. Housing forecasts for 2026 look strong, with the National Association of Realtors projecting a 14% year-over-year rise in existing-home sales and pending-sales data showing increasing activity. UWM's Mat Ishbia cites a 37% excess of sellers over buyers in November and expects more listings, stronger purchase demand, and potential refinance activity if rates ease.

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