One of the biggest stories of the past few years has been mortgage rates.
Everyone has been obsessed with mortgage rates, having seen them rise from all-time record lows in 2021 to a sky-high 8% by late 2023.
Since then, they seem to have finally settled in the low-6% range, with the average not much different this year versus last.
But there’s one positive trend for rates heading into 2026 that we didn’t see in 2025.
The trajectory of mortgage rates.
Mortgage Rates Hit a Lower Low Last Year
As mentioned, mortgage rates have been fairly flat if you zoom out over the past couple years.
I did the math and found that the average for the 30-year fixed in 2024 was 6.72% and 6.60% year-to-date for 2025, per Freddie Mac.
That’s a difference of less than an eighth of a percentage point. And because mortgage lenders typically price mortgage rates by eighths, a trivial change at that.
One could look at those two numbers and walk away thinking nothing has changed this year versus last.
However, we know that statistics don’t always capture the little nuances that can pack a lot of meaning.
At the same time, and this might seem hard to believe, the 30-year fixed actually was lower last year than it has been this year.
While it was perhaps short-lived, the 30-year fixed hit a low of 6.08% in 2024 and has only been as low as 6.17% in 2025.
So there was a time when borrowers could snag a lower rate last year, despite the annual average dipping slightly this year.
Not a huge difference mind you, but still lower, something many probably didn’t notice given the general positive trend since the start of this year.
But Mortgage Rates Are Falling Into the New Year
So what am I getting at here? Well, if you look at a mortgage rate chart (see above from MND) you’ll see that despite those averages being similar, and the 30-year fixed low being lower in 2024, the trend lately has been our friend.
Mortgage rates hit that low point back in September 2024 around the time of the first Fed rate cut, before surging higher.
As for why they jumped once the Fed finally cut, it wasn’t the Fed. It was a hot jobs report that happened to get released around the same time.
Followed by Trump becoming the frontrunner to win the presidential election. If you recall, many expected his policies to be inflationary.
And at the time, inflation was top of mind, with labor probably a very close second.
That resulted in the 30-year fixed climbing from just above 6% to 7.25% by mid-January 2025.
So mortgage rates were worsening heading into the New Year.
Since that time, mortgage rates have been on a pretty good ride, falling more than one full percentage point.
There are been ups and downs along the way, as always, but today mortgage rates are again just above 6%.
And the big difference is that we’re falling heading into the New Year this time around.
Mortgage Rates Are Hovering Near 3-Year Lows
While the start of 2025 was marked by the gut-punch of yet another setback for mortgage rates, the start of 2026 could be marked by sub-6% rates.
That would signal a huge psychological shift for prospective home buyers, while also boosting mortgage refinance volume.
Even if the difference in monthly payment is negligible, the outlook improves when mortgage rates are falling instead of rising.
In addition, the thought of rates stabilizing and not jumping back toward the 7s provides some peace of mind that the worst could be behind us.
It would also be a boon to home builders, who will feel more confident building more homes if they believe affordability is finally getting better.
So while mortgage rates might not look all that different if you use a zoomed-out average, momentum might be the key change today.
If and when mortgage rates do breach that key 6% threshold, I believe we’ll see more would-be buyers (and sellers) come to market.
That could boost home sales and get us closer to a normal, balanced housing market, something we’ve all craved for a long, long time.
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 19 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.