Mortgage rates forecast: where rates may head after topping 7%
Freddie Mac's 30-year average hit 7.03% in late September. Here's what Fannie Mae and MBA forecast for late 2026 and 2027, and what could change the outlook.
The average 30-year fixed mortgage rate rose to 7.03% in the week ending September 24, 2026, according to Freddie Mac, its highest weekly reading since January 2025. The latest forecasts from Fannie Mae and the Mortgage Bankers Association (MBA), both published earlier in September, expect rates to average about 6.7% to 6.8% through 2027, a little below where they stand now.
Forecasts are estimates, not guarantees, and both were prepared before the most recent jump in rates.
Key takeaways
- Freddie Mac’s 30-year fixed average was 7.03% for the week of September 24, up from 6.95% a week earlier and 6.30% a year ago.
- Fannie Mae’s September forecast expects the 30-year rate to average 6.8% in the fourth quarter of 2026 and 6.7% in 2027.
- MBA’s September forecast sees the 30-year rate averaging about 6.8% from the fourth quarter through mid-2027.
- Inflation, Federal Reserve policy and Treasury yields will shape whether rates move toward those forecasts.
Where mortgage rates stand now
Freddie Mac’s Primary Mortgage Market Survey put the 30-year fixed-rate average at 7.03% as of September 24, up from 6.95% the week before. A year earlier it was 6.30%. The 15-year fixed-rate average rose to 6.42% from 6.26% the prior week, compared with 5.49% a year ago.
The climb has been quick. The 30-year average was 6.66% in late August and as low as 5.98% in late February 2026, Freddie Mac’s weekly data show. The last time it was this high was mid-January 2025, when it reached 7.04%.
Freddie Mac’s averages come from home purchase applications on conventional, conforming loans, collected from the prior Thursday through Wednesday. The survey’s typical borrower has good to excellent credit and puts 20% down, so individual quotes can be higher or lower than the average.
What the latest forecasts say
Fannie Mae
Fannie Mae’s Economic and Strategic Research Group published its September Housing Forecast, dated September 11, 2026. It projects the 30-year fixed rate will average 6.8% in the fourth quarter of 2026 and 6.7% in each quarter of 2027. That works out to an annual average of 6.5% for 2026 and 6.7% for 2027.
Fannie Mae notes that its interest rate forecasts were based on rates as of August 31, 2026, before the September run-up.
Mortgage Bankers Association
MBA’s Mortgage Finance Forecast, released in mid-September, projects the 30-year fixed rate will average about 6.8% in the fourth quarter of 2026 and stay near that level through June 2027, according to Scotsman Guide’s report on the forecast.
MBA’s rate forecast tracks Freddie Mac’s 30-year average. The same forecast expects the 10-year Treasury yield to be about 4.8% at the end of 2026 and 4.7% at the end of 2027.
How the forecasts compare
| Forecast | Q4 2026 | First half of 2027 |
|---|---|---|
| Fannie Mae (September 11) | 6.8% | 6.7% |
| MBA (mid-September) | 6.8% | 6.8% |
Both forecasts put the fourth-quarter average about a quarter point below Freddie Mac’s latest weekly reading of 7.03%. For the fourth quarter to average 6.8%, rates would need to ease from current levels.
What could push rates higher or lower
Inflation and the Fed
The Federal Reserve raised its benchmark federal funds rate by a quarter percentage point on September 16, to a target range of 3.75% to 4%. It was the Fed’s first rate increase since 2023, and its statement said inflation “remains elevated.”
Consumer prices rose 3.4% in the 12 months through August, according to the Bureau of Labor Statistics, with energy prices up 16.3% over the year. Prices excluding food and energy rose 2.4%.
The Fed doesn’t set mortgage rates directly. But its decisions, and what investors expect it to do next, affect the bond yields lenders use to price home loans.
Treasury yields
Mortgage rates tend to follow the 10-year Treasury yield. That yield closed at 5.18% on September 24, up from 4.96% on September 22, according to Federal Reserve data. That’s already above the roughly 4.8% that both Fannie Mae and MBA expect toward the end of 2026.
If yields stay high or keep rising, mortgage rates could stay above the forecasts. If inflation cools and yields fall, rates could move back toward them.
What it means for buyers and homeowners
Small rate changes add up. On a $400,000, 30-year fixed loan, principal and interest at 7.03% comes to about $2,669 a month. At last year’s 6.30% average, it would be about $2,476, roughly $193 less each month. Property taxes, homeowners insurance and any mortgage insurance come on top of that.
Because rates can move week to week, borrowers comparing offers often look at the full cost of a loan, not just the rate. The annual percentage rate (APR) includes the interest rate plus certain fees, which makes it easier to compare loans side by side. A rate lock can hold a quoted rate for a set period, though the length and any fees vary by lender.
Forecasts are most useful as a range of likely outcomes. Both Fannie Mae and MBA revise their outlooks monthly, and Freddie Mac publishes new rate averages every Thursday.
