While many Americans remain optimistic about a few things the new year holds, the uncertainty surrounding the current economy and U.S. housing may remain. LendingTree experts revealed their predictions for 2026 as well as the important steps homebuyers, sellers, and owners can take to prepare.
It’s no secret that throughout the year, mortgage rates frequently fluctuate drastically. For instance, official data shows that the average annual percentage rate (APR) for a 30-year, fixed-rate mortgage was 7.04% during the week ending January 16, 2025. The average APR was 6.17% by the week ending October 30, 2025. The difference is 0.87 points, or nearly a whole percentage point.
That type of activity is not out of the ordinary, examining the weekly average APRs that were greatest and lowest during the previous five years.
30-year, fixed-rate mortgages: Differences in highest, lowest weekly average APRs
| Year | Highest weekly average APR | Lowest weekly average APR | Difference |
|---|---|---|---|
| 2024 | 7.22% | 6.08% | 1.14 points |
| 2023 | 7.79% | 6.09% | 1.70 points |
| 2022 | 7.08% | 3.22% | 3.86 points |
| 2021 | 3.18% | 2.65% | 0.53 points |
| 2020 | 3.72% | 2.66% | 1.06 points |
What Might 2026 Bring, After an Unpredictable 2025?
The Federal Reserve increased interest rates seven times in 2022, making that year an anomaly. However, the difference between the highest and lowest weekly average APRs of the year has never been less than a half-point since 2000. The average difference this century has been about a full percentage point, even if 2022 is taken out. There isn’t much evidence to suggest that will alter in 2026.
That does not, however, imply that rates will be significantly lower at the end of the year than they were at the start. Compared to the annual high and low, the difference between the first and last weekly averages of the year is typically much smaller. Ten times since 2000, including in 2023 and 2024, the difference between the first and last weekly APRs of the year has been a quarter-point or less.
In light of this, Matt Schulz, Chief Consumer Finance Analyst at LendingTree, believes that mortgage rates will eventually drop below 6.00% in 2026, but he does not anticipate that they will remain there. He also predicts that mortgage rates will be just above 6.00% at the end of 2026, even if the Fed lowers rates several times.
It’s unclear who will succeed current Fed Chairman Jerome Powell when his tenure expires in May, but signs point to President Donald Trump expecting the new chair to push for additional rate reduction in 2026. However, this does not imply that the Fed would raise interest rates drastically in 2026. Regardless of who is in charge, experts anticipate no more than two rate reductions in 2026.
The composition of the Federal Open Market Committee, which sets monetary policy, will essentially remain the same under the next head. Although significant policy changes from the Fed are unlikely under the next chair, pressure from the president and chair can undoubtedly have an effect.
2026 Federal Open Market Committee (FOMC) meeting schedule:
- Jan. 27-28
- March 17-18
- April 28-29
- June 16-17
- July 28-29
- Sept. 15-16
- Oct. 27-28
- Dec. 8-9
One significant disclaimer is that the Supreme Court is anticipated to make a decision this term in two cases pertaining to the president’s power to dismiss employees of independent government agencies: the Federal Reserve and the Federal Trade Commission. The possibility of more rate cuts in 2026 and beyond may rise if the court rules in favor of the president in these cases.
Consumers Remain Flexible as Mortgage Debt, Delinquencies Tick Up
According to the most recent official data, the totals of student loan debt, credit card debt, vehicle loan debt, and mortgage debt are at an all-time high. Although they are not at record levels, delinquency rates are nonetheless high.
However, Schulz revealed that the bad news is that in 2026, things will likely get at least slightly worse. Part of the reason debt will increase is because it does so in America. It’s as risky to forecast rising debt as it is to forecast when the sun will set. As Americans suffer with persistently high pricing, delinquencies will probably continue to climb.
But there’s good news. Despite ongoing inflation, high interest rates, a volatile labor market, and general economic instability, Americans manage their businesses. There is little reason to believe that Americans will reach their breaking point in 2026 unless there is a significant increase in unemployment. One significant factor is that the portion of American’s disposable income that they can allocate to debt repayment, which is still below historical averages and far from reaching record highs.
Percentage of Americans’ disposable income that goes toward required debt payments
| Type of debt | Q2 2025 % (latest) | Quarterly average since 1980 | Quarterly average since 2000 | Quarterly average since 2015 | Highest quarterly % | Lowest quarterly % |
|---|---|---|---|---|---|---|
| Mortgage | 5.89% | 6.06% | 6.50% | 5.76% | 8.95% | 4.37% |
| Non-mortgage | 5.36% | 5.80% | 5.94% | 5.39% | 7.31% | 4.31% |
| Overall total | 11.25% | 11.86% | 12.45% | 11.15% | 15.85% | 9.08% |
The total amount of debt is increasing, but not to the point where most people can no longer manage it. Considering that the total amount of debt owed by Americans is an estimated $18.59 trillion, that may seem absurd. The data, however, demonstrates that this is accurate.
In 2025, President Trump proposed a 50-year mortgage in an attempt to stimulate a mostly stagnant housing market. The idea was that more consumers might go home shopping as a result of the longer loan period and reduced monthly payments.
Both sides were skeptical of the suggestion. While the 50-year mortgage would probably have cheaper payments, many LendingTree experts, pointed out that it would also result in homeowners paying significantly more interest and generating equity much more slowly over the course of the loan. Because of this, most individuals found it difficult to recommend.
According to reports, the administration is also thinking about adopting “portable mortgages” to open up the housing market. This means Americans can take their current mortgage with them when or if they relocate with a portable mortgage, which is currently accessible in Canada and the UK but not the U.S. In order to avoid today’s rates of more than 6.00%, someone who purchased a property a few years ago with an APR of 2.75% would be able to keep it if they bought a new house today.
In order to encourage Americans to purchase homes now rather than wait for interest rates to decline, portable mortgages might be just what’s needed for some. However, 50-year or transferable mortgages won’t be available in 2026. Even if they eventually come to pass nationwide, it will probably take years, and that won’t help today’s struggling homeowners at all.
Falling Mortgage Rates, Credit Offers Pros & Cons for Consumers
For many American consumers, declining rates are a “double-edged sword,” according to Schulz. They are fantastic for those who are in debt, but they aren’t beneficial for those who want to increase their savings. Regretfully, those looking to save won’t have much better news in 2026.
Over the past few years, high-yield savings accounts (HYSAs) have shown to be an incredible instrument. Americans have been able to increase their emergency savings and accelerate their ability to save for down payments on cars and mortgages thanks to returns of 4.00% or more, even 5.00% or more at their peak in 2024. However, those 4.00% HYSA gains are probably going to disappear if the Fed cuts rates several times in the coming year.
It will undoubtedly happen eventually. Not quite yet, though. One megabank offered customers a card with an annual cost of $895 in 2025, marking the next significant development in the rise of high-end credit card fees. That yearly cost would have made many gasp years ago. It made news last year, but there wasn’t much shock. In the next two to four years, one of the largest credit card companies will most likely release a $1,000 annual fee credit card.
According to a 2024 LendingTree survey, 3% of cardholders—or 6% of Gen Zers—would think about applying for a card with an annual cost of $1,000. Even though that 3% is little, it still represents millions of prospective clients. More than one-third of cardholders would not cancel their current annual-fee cards if the prices raised by $100 without providing any additional benefits, according to a separate 2025 LendingTree survey. This implies that there is probably plenty of space for annual prices to increase before individuals stop paying. In 2026 and beyond, expect issuers to keep pushing those limits.
While Refis Rise, Homebuyers Remain Hesitant to Purchase
Many Americans would love to purchase a new home, but they find it difficult to exchange their low mortgage rate for the higher rates of today. That’s not likely to change in 2026, barring an unanticipated decline in mortgage rates, which is bad news for homebuyers.
Those wishing to refinance their existing high-rate mortgage will benefit from the news. Refinances increased when mortgage rates dropped in the fall of 2025, and this trend is probably going to continue as rates continue to decline in 2026.
The extent of the increase will depend on how much rates decline, but if they fall below 6.00%, even for a little period of time, I believe there may be a significant increase in refinancing. I believe a sizable portion of homeowners would jump to refinance if rates dropped below 6.00% since Americans favor round numbers.
The post Experts Share 2026 Housing Market, Affordability Forecast first appeared on The MortgagePoint.
