Mortgage Rates Below 6% by 2026? The Real Estate Market Shift You've Been Waiting For

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News Flash

Mortgage Rates Projected to Go Down

Fannie Mae just dropped some refreshing projections for anyone tired of the rate roller coaster. Their latest forecast shows mortgage rates falling below 6% by the end of 2026.

Here's the timeline, according to Fannie: Rates should finish 2025 at 6.4%, then drop to 5.9% by late 2026.

What does this mean for your business? Home sales are projected to jump from 4.72 million in 2025 to 5.16 million in 2026. Single-family mortgage originations are projected to grow from $1.85 trillion to $2.32 trillion.

The refinance market is where things get really interesting. Fannie Mae expects the refi share to climb from 26% in 2025 to 35% in 2026. Real estate professionals, your pipeline is about to get busier.

The math is compelling. A $1 million 30-year fixed mortgage at 6.13% means monthly payments around $6,079 — down from over $6,600 earlier this year.

Rate drops matter. Industry data shows that even a half-point decrease from 7% to 6.5% opens homebuying opportunities for millions more households.

Do Buyers Actually Have Leverage Right Now?

Here's something you don't hear often: Fall 2025 might be the best time to buy in years.

Zillow research shows inventory near a six-year high, up 15% from last year. Your buyers have choices again.

But there's a catch. New listings dropped 7.3% from July to August as sellers pulled back. This window might not stay open long.

The shift is real. Competition has cooled thanks to affordability challenges and elevated rates. Multiple-offer bidding wars? Less common. Room to negotiate? Finally.

Builders are responding with incentives and price cuts. Homes are staying on market longer, giving buyers time to actually think about their decisions.

One interesting trend: Fixer-uppers are getting 52% more page views than comparable listings, especially in markets like St. Louis and Detroit. Buyers are getting creative about affordability.

Sources: [Source], [Source], [Source], [Source]

More You Should Know

• Builder Confidence Stalls: Builder confidence remained steady in September, yet a notable increase in builders cutting prices to 39% and a decrease in buyer traffic suggest ongoing challenges in the housing market despite improved sales expectations. [Source]

• Global Real Estate Recovers: Global real estate investments reached $380 billion in H1 2025, with commercial real estate transactions totaling $193 billion in Q2 and office transactions up 12% year-over-year globally, signaling a market recovery. [Source]

• Title Industry’s 2025 Outlook: In 2025, the title industry is set to navigate evolving technological and regulatory landscapes by enhancing cybersecurity, utilizing predictive modeling for risk assessment and fraud detection, and preparing for stricter Consumer Financial Protection Bureau regulations aimed at improving disclosure requirements and transparency. [Source]

• Proptech's Future: Digital, Green, Smart: Proptech is rapidly evolving in 2025, with a strong focus on enhancing digital tenant experiences, integrating sustainability solutions, and leveraging AI-driven platforms for predictive analytics, energy efficiency, and due diligence, further supported by increasing investments in blockchain and pervasive connectivity through 5G and IoT networks. [Source]

• Construction Starts See Mixed August: Total construction starts experienced a modest rebound in August, rising 1.7% to $1.23 trillion, despite a notable decline in nonresidential building starts, particularly in commercial and manufacturing sectors. [Source]

• Regional Housing Markets Diverge: The U.S. housing market is experiencing increasing regional disparities, with the Northeast and Midwest characterized by fast sales and low inventory, while the South and West are seeing homes sit longer and offer more choices for buyers. [Source]

• Home Prices See First Drop: For the first time since spring 2025, national median list prices fell 0.9% year-over-year for the week ending September 6, with new listings also decreasing, signaling sellers are adjusting expectations amid ongoing affordability challenges. [Source]

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