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Mortgage rates have been volatile since the beginning of the Middle East conflict. But where are rates headed in the next five years, and should you wait for mortgage rates to fall significantly before buying or refinancing? Mortgage interest rates are determined by several factors, all of which can give us clues about the future. Let’s take a closer look at mortgage rate predictions over the next five years.
Here are the housing market predictions for 2026.
One of the most useful indicators for predicting mortgage rates is the yield on the 10-year U.S. Treasury note. Mortgage rates and 10-year Treasury yields typically move in the same direction, although mortgage rates are usually higher because lenders factor in additional risks. This difference between the two is known as the spread, and we’ll account for that when estimating where mortgage rates could go.
With that in mind, the first step is to look at where economists believe Treasury yields are headed over the next five years. To build a forecast, we’ll combine expert economic projections with data compiled using artificial intelligence.