Mortgage rates could dip in 2026 but not by much

😅 Finally Friday. Today’s newsletter is 686 words, a 2.5-minute read. Let’s dive in…

1. Mortgage rates could dip in 2026 but not by much

Elevated mortgage rates have kept buyers on the sidelines and 2026 is expected to ease some of that pressure but not by much.

Housing forecasters see the 30-year fixed rate hovering around 6% next year — lower than this year’s 6.6% average but nowhere near the sub-3% rates buyers remember from 2021.

Predictions for the average 30-year fixed rate in 2026:

• Redfin: 6.3%

• Realtor’com: 6.3%

• Zillow: Expects rates to “hold above 6%”

• National Association of Realtors: 6.0%

• Fannie Mae: 6.0%

If those forecasts prove accurate, 2026 would extend the slow drift lower that has eased borrowing costs, but not enough to materially improve affordability.

2. Fed cuts rates for 3rd time in 2025

The Fed cut its benchmark rate by another 25 basis points, bringing the federal funds rate to 3.50%–3.75%, the lowest level since November 2022. It is the third rate cut in four months, signaling a shift toward easier borrowing conditions across the economy.

Mortgage rates are not directly tied to the Fed’s rate moves, since fixed mortgage pricing depends more on inflation expectations, investor sentiment, and the 10-year Treasury yield. Because this cut was widely anticipated, lenders likely priced most of it in already, making any immediate mortgage-rate drop unlikely.

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3. More Nuggets

💸 JPMorgan hands $1,000 to employees who earn less than $80,000. (Barrons)

💼 Equifax launches new income qualify product. (Equifax)

🏠 HUD pauses changes to homelessness program amid lawsuits. (HousingWire)

🔐 Top markets where homeowners are still ‘Locked-In’ by high mortgage rates. (Realtor)

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4. Foreclosure starts rise 17% in November

According to ATTOM’s November Foreclosure Market Report, 35,651 properties had foreclosure filings, including default notices, scheduled auctions, and bank repossessions. That’s down 3% from October 2025 but up 21% year over year.

Nationwide, 1 in every 3,992 housing units had a foreclosure filing during the month.

5. VA lending surges in 2025

The U.S. Department of Veterans Affairs (VA) home loan program rebounded sharply in fiscal year 2025, reversing the prior year’s slowdown, according to an analysis from Veterans United Home Loans.

VA loan volume rose 26.8% to 528,343 loans closed, up from 416,363 in fiscal 2024, as purchase activity steadied and refinancing picked up. VA purchase loans increased 8.5% to 323,835 after a 5% decline the year before.

Generation Z drove much of the momentum, accounting for 38% of VA loan activity and leading all age groups in purchase growth, benefiting from VA features that help borrowers compete despite affordability pressures.

☀️ You’re all caught up. See you on Monday!

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