U.S. Mortgage Rate Forecast 2026, 2027 and 2028: Everything You Need to Know

Updated: June 30th 2025

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Understanding the trajectory of U.S. mortgage rates is crucial for U.S. homebuyers planning their next move. For investors, it’s essential for optimizing cash flow from our rental property investments. While 2024 and much of 2025 have presented a “higher for longer” interest rate environment, major housing experts are now signalling significant shifts that could reshape the market in 2026, 2027 and 2028.

This article sheds light on the latest U.S. mortgage rate forecasts for the next 3 years. We’ll explore expert predictions, and delve into the economic forces at play. For real estate investors like myself, we’ll discuss the strategic implications for your U.S. property investment portfolio, ensuring you’re well-equipped to capitalize on emerging opportunities.

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Key Takeaways: U.S. Mortgage Rate Forecast 2026 for International Investors

• Gradual Decline Anticipated: After a period of elevated rates, leading experts generally foresee a gradual downward trend in 30-year fixed mortgage rates through late 2025, 2026, and into 2027. Forecasts for 2028 are less common but suggest continued stability or slight further declines.

• Revised Predictions: Recent forecasts, particularly from Fannie Mae, indicate slight upward revisions compared to earlier optimistic predictions, reflecting ongoing economic adjustments and persistent factors.

• Impact on Affordability: Even modest declines in rates are expected to enhance housing affordability, potentially stimulating home sales and increasing overall market activity.

• Boosting Cash Flow: For investors, a sustained easing of rates can significantly improve consistent cash flow rentals by making new acquisitions more financially attractive and creating favourable refinancing opportunities.

• Key Market Drivers: The Federal Reserve’s monetary policy, inflation data, and the performance of the bond market remain the primary forces influencing these long-term forecasts.

• Strategic Advantage: Accessing and understanding these extended predictions empowers inversores internacionales to make more robust, long-term decisions, thereby protecting their long-term wealth and optimizing their U.S. property investment strategies.

Related: The Best U.S. Real Estate Markets for First Time Investors

Section 1: The Latest U.S. Mortgage Rate Forecasts (2025-2028)

The U.S. mortgage market is a dynamic arena, constantly influenced by a complex interplay of economic indicators and policy decisions. For international real estate investors, tracking expert forecasts across multiple years is essential for crafting resilient U.S. property investment strategies. Here’s an updated look at the most recent predictions from prominent housing authorities, now extending to 2028 where data is available.

U.S. 30-Year Fixed Mortgage Rate Forecasts (Annual Averages/End of Year)

Leading institutions regularly update their outlooks for the 30-year fixed mortgage rate, which serves as a critical benchmark for the entire housing market. These extended forecasts provide investors with valuable insights into potential future borrowing costs.

Data Sources: Fannie Mae Economic Developments – June 2025, National Mortgage Professional – Housing Market Outlook: Brighter Days To Come (June 2025, referencing NAR), MBA Forecast: Mortgage Originations to Increase 28 percent to $2.3 Trillion in 2025 (October 2024).

Key Observations from Rate Forecasts:

• Fannie Mae’s June 2025 forecast shows a slight upward revision for the end of 2025 (to 6.5%) but still projects a decline into 2026 (6.1%). Their latest public forecasts do not extend beyond 2026.

• NAR’s Lawrence Yun maintains a consistent outlook, expecting rates to average 6.4% in the second half of 2025 and then settle around 6.1% in 2026. Similar to Fannie Mae, NAR’s most recent detailed forecasts publicly available do not extend to 2027 or 2028.

• The MBA’s October 2024 forecast provides a longer-term perspective, projecting rates to end 2025 at approximately 5.9% and remain near that level for the “forecast horizon,” implying stability through 2026, 2027, and 2028. This outlook is notably more optimistic than those from Fannie Mae and NAR for the near term.

These predictions collectively suggest that while the era of exceptionally low rates is likely in the past, a gradual and moderate easing is generally anticipated, which could gradually bring more activity to the housing market.

Related: ITIN Loans for Non-Residents: Everything you Need to Know

U.S. Housing Market Forecasts (Sales & Prices)

Beyond just mortgage rates, these expert organizations also offer valuable insights into expected home sales volumes and price appreciation. These metrics are crucial for inversores internacionales primarily focused on long-term wealth accumulation and the performance of their cash flow rentals.

Data Sources: Fannie Mae Economic Developments – June 2025, National Mortgage Professional – Housing Market Outlook: Brighter Days To Come (June 2025, referencing NAR), MBA Forecast: Mortgage Originations to Increase 28 percent to $2.3 Trillion in 2025 (October 2024).

Insights from Sales & Price Forecasts:

• Home Sales Recovery: Both Fannie Mae and NAR anticipate a notable rebound in existing home sales in 2026, following a more subdued performance in 2025. This suggests that a gradual easing of rates could unlock significant pent-up demand in the market.

• Steady Price Appreciation: Median home prices are consistently projected to continue their modest upward trend. This indicates a market that offers steady, rather than volatile, appreciation for property investors, contributing reliably to long-term wealth.

• Origination Growth: The MBA’s focus on increasing mortgage origination volumes signals a growing appetite for lending and borrowing activity. This is generally a positive sign for the overall health and liquidity of the housing market.

Related: U.S. Real Estate markets Forecast for the Next Five Years to 2030: Expert Predictions

Section 2: Decoding the Forecasts – Key Economic Influences

Understanding the fundamental economic forces that shape mortgage rate forecasts is paramount for inversores internacionales. This knowledge empowers you to anticipate market shifts and proactively safeguard the stability and profitability of your cash flow rentals.

The Federal Reserve’s Strategy and Inflation Dynamics

The decisions made by the Federal Reserve regarding interest rates have a significant influence on the broader financial landscape. While the Fed does not directly dictate mortgage rates, its actions affect the overall economy and general borrowing costs. The Fed analyses inflation data; a sustained cooling of inflation could make the Fed more inclined to implement rate cuts, which would then indirectly lead to lower mortgage rates.

As Jeb Smith, a licensed real estate agent and CNET Money expert, insightfully remarked, “If rates fall below 6%, we could see a big jump in refinance activity.” This underscores how even seemingly small reductions in rates can trigger substantial shifts in market behaviour and investor interest.

Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), has famously described mortgage rates as the “magic bullet” for housing market recovery. He emphasizes that the Fed’s cautious stance, influenced by persistent inflationary components like shelter costs, might lead to a delay in more aggressive rate reductions.

Related: U.S. Mortgages for Foreign Nationals and Non-Residents: Everything You Need to Know

The Bond Market’s Pulse and Incoming Economic Data

The yield on the 10-year U.S. Treasury bond is a particularly strong bellwether for the direction of mortgage rates. Typically, when bond yields decline, mortgage rates tend to follow suit. Furthermore, comprehensive economic data, encompassing metrics like Gross Domestic Product (GDP) growth and employment figures, plays a significant role. Robust economic performance can sometimes exert upward pressure on rates, whereas signs of an economic slowdown might encourage a more dovish stance from the Fed, potentially leading to rate cuts.

Doug Duncan, Chief Economist at Fannie Mae, highlighted the complexity, stating that “recent interest rate movements… alongside continued economic uncertainty and mounting geopolitical tensions, have kept mortgage rates elevated.” This emphasizes that a confluence of factors, extending beyond purely domestic economic indicators, contributes to the current rate environment.

Related: U.S. Mortgages for UK Residents: Your Essential 2025 Guide

Navigating Volatility and the Path Ahead

It’s crucial to remember that forecasts are not immutable. The market is inherently volatile, constantly reacting to new economic data, shifts in policy, and unforeseen global events. Melissa Cohn, an expert reviewer for CNET, articulated this sentiment, noting: “There are many people who have been waiting to refinance. The question is, at what rate will the floodgates open? My guess is 5.5%.” This suggests a substantial reservoir of pent-up demand poised to enter the market once more favourable rates materialize.

For property investors, this implies the necessity of maintaining an agile investment posture. While the overarching trend points towards slightly lower rates over the coming years, being prepared for potential fluctuations is key to protecting and maximizing your consistent cash flow.

Related: DSCR Loans for Non-Residents: Your Essential Guide for 2025

Section 3: Strategic Implications for International Investors – Optimizing Your Portfolio for the Long Term

The updated and extended mortgage rate forecasts carry profound implications for international real estate investors. Your investment strategy must remain highly adaptable, with an unwavering focus on bolstering your long-term wealth across the extended forecast horizon.

Enhancing Affordability and Market Dynamics

Should mortgage rates indeed experience a gradual decline as predicted, it will significantly improve housing affordability. This improved affordability is expected to draw more potential buyers into the market, leading to an increase in overall home sales activity. For property investors, this scenario could translate into:

• Increased Rental Demand: A healthier and more active sales market can indirectly bolster rental demand. Some individuals may opt to continue renting while saving for a purchase, or if they face challenges qualifying for a mortgage even with slightly lower rates.

• Potential for Steady Appreciation: While a return to rapid, double-digit appreciation is not widely anticipated, a more active market with stable demand can contribute to consistent and predictable property value growth over the long term. This steady appreciation is a key component of long-term wealth building.

Related: The Best U.S. Real Estate Markets for Non-resident investors: States, Cities and Neighbourhoods

Maximizing Your Cash Flow from Rentals

A sustained trend of lower interest rates can directly and positively impact your cash flow rentals:

• More Favourable New Acquisitions: If you are actively looking to expand your investment portfolio, slightly lower rates will reduce your monthly mortgage payments on new property acquisitions. This directly translates into higher net rental income and improved cash flow.

• Refinancing Opportunities: For properties already within your portfolio, a decline in rates could present opportune moments to refinance existing mortgages. This can lead to lower monthly payments, thereby freeing up more capital for other investments or enhancing your consistent cash flow. Furthermore, refinancing can be strategically utilized to adjust your investment structure for improved tax efficiency.

Related: U.S. Mortgage Rates for Foreign Nationals and Non-Residents: Essential 2025 Guide

The Indispensable Role of a Trusted Local Partner

Navigating these complex, multi-year forecasts and the intricate dynamics of the U.S. market from overseas necessitates expert guidance. A reliable local partner is an invaluable asset for inversores internacionales. They can provide comprehensive assistance with:

• In-depth Market Analysis: Helping you pinpoint the most promising local markets that align precisely with your cash flow and long-term wealth objectives, taking into account both purchase and rental market trends.

• Thorough Due Diligence: Guiding you through meticulous property evaluations, ensuring you fully comprehend all financial implications, potential risks, and the long-term viability of an investment.

• Specialized Financing Expertise: Connecting you with lenders who specialize in non-resident mortgages, including Foreign National, ITIN, and DSCR loans. They will help you navigate the specific requirements and secure the most advantageous terms.

• Professional Property Management: Ensuring your rental properties are managed with utmost efficiency, covering everything from strategic tenant acquisition and consistent rent collection to proactive maintenance and regulatory compliance. This is absolutely crucial for maintaining consistent cash flow.

• Comprehensive Tax and Legal Guidance: Providing expert advice on U.S. and local tax liabilities and assisting in establishing the most tax-efficient and liability-protected investment structures (e.g., LLCs, C-Corps, trusts) for your portfolio.

A robust and experienced local team serves as your strategic advantage, empowering you to make well-informed decisions and secure consistently profitable U.S. property investment.

Related: How to Structure Your U.S. Property Investment for Tax Efficiency and Liability Protection

Conclusion: Charting Your Course for Accelerated Wealth Growth

The extended U.S. mortgage rate forecasts for 2025 through 2028 generally point towards a period of gradual easing and relative stability. This outlook creates a more predictable and potentially advantageous environment for international real estate investors. While a return to the exceptionally low rates of the past is not widely anticipated, the projected stability and modest declines present clear and compelling opportunities for U.S. property investment.

Success in this evolving landscape is contingent upon understanding the market fundamentals and specialized non-resident financing options. Most important for overseas investors is conservative deal underwriting and strategic selection of properties capable of generating consistent cash flow. By staying informed and actively collaborating with a competent local team, you will be well-positioned to expand your investment portfolio, and cultivate significant long-term wealth and robust passive income.

Related: Lender List 2025: U.S. Mortgage Lenders with Foreign National Loan Programs

Frequently Asked Questions (FAQs) About U.S. Mortgage Rate Forecasts for Investors

• Q1: What are the latest U.S. 30-year fixed mortgage rate forecasts for the end of 2025? A1: Leading experts generally forecast a gradual decline in 30-year fixed mortgage rates through late 2025. Fannie Mae’s June 2025 outlook predicts rates around 6.5% by Q4 2025. NAR’s Lawrence Yun forecasts averages of 6.4% in the second half of 2025, while the MBA’s October 2024 forecast suggests rates will be approximately 5.9% by the end of 2025.

• Q2: What are the current expert predictions for U.S. 30-year fixed mortgage rates in 2026? A2: For 2026, Fannie Mae’s June 2025 forecast projects rates around 6.1% by Q4 2026. NAR’s Lawrence Yun also anticipates averages of 6.1% for the year. The MBA’s October 2024 forecast suggests rates will remain near 5.9% throughout 2026.

• Q3: What do experts forecast for U.S. 30-year fixed mortgage rates in 2027? A3: While Fannie Mae and NAR’s latest public forecasts do not extend to 2027, the MBA’s October 2024 forecast suggests that 30-year fixed mortgage rates will remain stable at approximately 5.9% throughout 2027, indicating a continued period of consistency.

• Q4: Are there any forecasts available for U.S. 30-year fixed mortgage rates in 2028? A4: Detailed forecasts from major institutions like Fannie Mae and NAR typically do not extend as far as 2028. However, the MBA’s October 2024 forecast implies that 30-year fixed mortgage rates are expected to remain stable at around 5.9% through 2028, suggesting a prolonged period of rate consistency.

• Q5: How do these extended forecasts impact housing market activity and home prices for investors? A5: Lower mortgage rates over the forecast period are expected to improve housing affordability, which can stimulate home sales and potentially increase demand. Both Fannie Mae and NAR anticipate a rebound in existing home sales in 2026, with modest, consistent home price appreciation projected across the forecast period. This outlook supports long-term wealth building for property investors.

• Q6: How can a gradual decline in mortgage rates benefit my cash flow rentals over the long term? A6: A sustained decline in rates can significantly enhance your consistent cash flow rentals by lowering monthly mortgage payments for new purchases. It also creates valuable opportunities to refinance existing properties at more favorable rates, thereby freeing up capital for further investment and optimizing your portfolio’s profitability over several years.

• Q7: What is the primary goal for international investors when reviewing these extended mortgage rate forecasts? A7: The main goal is to leverage these insights for U.S. property investment that generates consistent cash flow and builds long-term wealth. Understanding future rate trends helps in strategic timing of purchases, refinancing, and overall portfolio optimization for sustained profitability over several years.

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