Mortgage Interest Rates Forecast

Mortgage rates rose this week, even as the Federal Reserve voted to lower the federal funds rate by 25 basis points at it's Dec. 9-10 meeting. Lenders had already priced in that cut, and rates had drifted lower in the weeks leading up to the meeting. With October’s CPI and jobs reports canceled and November data not yet released, policymakers were debating inflation and growth using only September numbers — which left some Fed members urging caution while others pushed for easing.

The next meaningful shift in mortgage rates will likely come from new federal data rather than the Fed's rate cut itself. The November jobs report (Dec. 16) and CPI release (Dec. 18) will give analysts their first real pulse-check in months. If both indicators soften, forecasters may lean toward additional cuts in 2026, which could lower mortgage rates and improve refinancing prospects for homeowners who’ve been waiting on relief. If employment or inflation heats up, rates could move higher instead. And if the signals are mixed, expect more disagreement inside the Fed and a bit more rate volatility for borrowers.

»MORE: Mortgage refinance calculator

December mortgage rates forecast

Mortgage rates could continue to trend higher in December, especially after a bumpy November filled with mixed signals from the Federal Reserve. With December's Fed meeting behind us, 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.

»MORE: How the Fed Affects Mortgage Rates