Mortgage Interest Rates Forecast

Mortgage rates were volatile this week as investors tried to figure out whether the Federal Reserve will cut the federal funds rate at its next meeting. After some early ups and downs, the average 30-year fixed rate settled at 6% APR, thanks to fresh data from payroll processing firm ADP showing the job market is losing a little steam. That softness has forecasters betting on a rate cut in mid-December — though not everyone at the Fed is convinced.

Lower mortgage rates sound great, especially if you’re a homeowner waiting to refinance. But a rate cut isn’t automatically good news across the board. If the Fed moves too quickly in an effort to bolster employment, it could bring inflation roaring back. Households are already feeling stretched. So if a rate cut does happen, it’ll be a careful decision — one the Fed won’t be able to take back.

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December mortgage rates forecast

Mortgage rates could trend higher in December, especially after a bumpy November filled with mixed signals from the Federal Reserve. While many analysts foresee a rate cut at the Fed’s Dec. 9–10 meeting, that decision will likely affect only early December. After that, lenders will shift their focus to what they think the Fed will do in 2026, and policymakers are still split on whether to prioritize fighting inflation or supporting the job market.

We’ve already seen how disagreement inside the Fed can send rates bouncing around from one day to the next, depending on who’s speaking. With key economic reports like GDP and the Fed’s preferred inflation index delayed, there’s even less clarity than usual — and that tends to make lenders nervous. Mortgage Bankers Association and Fannie Mae expect rates to average around 6.3% this quarter, which means rates would need to rise in December to hit that mark.

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