Table of Contents

• Why Expectations Matter More Than Rates

• Buyers Adjusted Their Rate Tolerance

• What This Means for Buyers

• What This Means for Sellers

• Looking Ahead to 2026

Looking across forecasts from 21 major housing research groups, the average expectation for the 30 year fixed mortgage rate in 2026 lands at 6.18 percent. Estimates range from roughly 5.75 percent on the low end to about 6.60 percent on the high end.

At the time of writing this newsletter, rates sit near 6.20 percent. Earlier in 2025, this newsletter referenced a 6.34 percent projection. Current rates now track slightly below that estimate. The market aligned with the forecast sooner than expected.

Why Expectations Matter More Than Rates

Earlier this year, this newsletter focused on one idea. Expectations.

The article looked at where the market had been, where it was heading, and how mortgage rate forecasts were shaping decisions. Rates near 5 percent had anchored expectations for years. When rates moved higher, activity slowed as people waited for a return to those levels.

The article examined how forecasted rates influenced timing more than price or inventory. You can read the context 👉 here 👈

New data now shows expectations shifting.

Buyers Adjusted Their Rate Tolerance

Recent surveys show buyers accept higher rates than in prior years. Many report comfort in the low to mid 6 percent range.

Once buyers accept current rates, decisions resume.

Once rates stop surprising people, planning improves.

Once expectations align with reality, movement follows.

What This Means for Buyers

Rates near current levels align with long term forecasts. Waiting for a major drop introduces risk. Inventory and competition now matter more than rate predictions.

Focus on monthly payment comfort.

Track local inventory and days on market.

Move forward when a home fits budget and timing.

What This Means for Sellers

Buyers adjusted expectations. Pricing must follow. Overpricing tied to past rate environments leads to longer market time. Homes priced for current demand still sell.

Focus on condition and presentation.

Price for today’s buyers.

Expect informed buyers who already accepted current financing costs.

Looking Ahead to 2026

Forecasts point to normalization. No sharp drop. No surge. A steady range where expectations stabilize and activity returns.

The core question heading into 2026 stays simple.

Have expectations caught up to reality.

The data says yes.

If buying or selling sits on your 2026 horizon, now works as the moment to reset assumptions. Review numbers. Study local demand. Build a plan grounded in current conditions.

Reply to this email if you want a local breakdown tied to your price range, timing, and goals.

How do you see 2026 shaping up for you?