WASHINGTON–Mortgage rates could remain above 6% for the next several years, according to newly released projections from economists at the Mortgage Bankers Association, even as they also predict an increase in home sales in 2026.
In remarks to the group’s annual meeting in Las Vegas, MBA Chief Economist Mike Fratantoni shared a forecast projecting that 30-year fixed mortgage rates will remain roughly in the range of 6% to 6.5% through the end of 2028.
“As we move over the next couple of years, we think it’s more likely that long-term rates are going to go up rather than down, given the fiscal pressures on the economy,” Fratantoni told the conference, referring to the impact of rising federal deficits on bond markets.
Fratantoni’s comments were reported by Realtor.com.
‘Grim Forecast’
“That’s a grim forecast for prospective homebuyers, who have already suffered through three straight years of mortgage rates hovering above 6%, with rates averaging 6.27% as of last week, according to Freddie Mac,” Realtor.com said. “It’s also among the bleaker predictions issued by top economists in the housing industry, with with Fannie Mae’s forecast more optimistic that mortgage rates will dip below 6% in late 2026.”
Fratantoni predicted the Federal Reserve will cut its short-term policy rate twice more in 2025 — in line with what credit union economists are also predicting — but only once in 2026, as concerns about inflation force the central bank to halt its cuts.
The economist believes growing government budget deficits and elevated inflation expectations will keep longer-term rates from falling further, even as the Fed cuts short-term rates this year and next, Realtor.com said.
Rates May Ease at Times
“This will keep the key 10-year Treasury yield above 4% and mortgage rates between 6% and 6.5%,” the report stated. “However, he expects there will be periods where rates ease, which will provide spurts of refinance activity, similar to what has occurred several times in 2025.”
Despite the bleak outlook on rates, Fratantoni expects total home sales will increase next year to just above five-million, up from the 4.8 million the MBA projects for 2025, including sales of both new and existing homes, Realtor.com noted.
