The Federal Reserve lowered the Fed Funds Rate at the December
10th Fed meeting and could be on course to possibly lower rates further in
early 2026. Lower Fed Funds rates mainly affect short-term borrowing costs,
which can lower rates on adjustable-rate mortgages, home equity lines of
credit, and other variable-rate loans like credit cards and some personal or
auto loans. Fixed-rate mortgages aren't directly tied to the Fed, but lower
rates can still influence refinancing activity and overall borrowing costs.
Watching these shifts can help buyers and homeowners plan for potential savings
in 2026.
Forecasts for the 30-year fixed mortgage rate in 2026 suggest
modest declines, though rates are likely to remain elevated by historical
standards. Fannie Mae projects the average rate will fall to about 5.9% by the
end of 2026, down from 6.4% in 2025. The Mortgage Bankers Association (MBA)
anticipates a slightly higher rate of around 6.4% by year-end, while NerdWallet
expects rates to remain at or above 6.5% throughout 2026. Overall, these
projections point to only gradual relief for borrowers, indicating that
mortgage costs will likely stay relatively high even as the housing market
adjusts.
Consumer spending trends will also play a key role in the
housing market in 2026. Real retail sales have shown steady growth over the
past year, reflecting resilient consumer demand despite some month-to-month
fluctuations. Continued strength in household spending can support home
purchases and refinancings, while any slowdown could temper housing activity
and buyer confidence. Real retail sales measure consumer spending on goods and
services adjusted for inflation.
Bottom line: While 2025 is ending on a positive note for
housing, 2026 could offer modest relief on mortgage rates, with borrowing costs
remaining elevated but consumer demand staying steady. Buyers, sellers, and
investors should keep an eye on rates, affordability, and lending trends to
make the most of opportunities in the year ahead.
Source: Mortgage Market Guide
Team Lasson is here to assist with
all of your home buying needs! If you’re
considering taking the leap into home ownership in the near future, we’re here
to help. Contact us today to explore
which loan program aligns best with your financial goals.
The first step in preparing for your big purchase is to get
pre-approved for a mortgage at Lake of the Ozarks. Visit www.yourlakeloan.com or
call us at (573) 216-7258 to get started today!
Michael Lasson
Senior Mortgage Banker
NMLS #: 493712
Flat Branch Home Loans – Team Lasson
2882 Bagnell Dam Blvd
Lake Ozark, MO 65049
Cell: (573)
216-7258
Email: teamlasson@fbhl.com
Website: www.yourlakeloan.com
**The
postings on this site are my own and do not necessarily represent Flat Branch
Home Loans positions, strategies, or opinions.
Flat Branch Home Loans
NMLS 224149. A Division of Flat Branch Mortgage Inc.
For more licensing
information, visit NMLSConsumerAccess.org
