Mortgage rates wrapped up 2025 on a positive note, offering a bit of late-year relief for buyers and setting the stage for potentially more favorable conditions in 2026. While lower rates are helping improve affordability, economists caution that many would-be buyers may still find themselves priced out in the year ahead.
Rates hit their lowest point of the year
According to Freddie Mac, the average 30-year fixed mortgage rate fell to 6.15% this week—the lowest level seen in all of 2025. Rates have remained relatively steady since late November, hovering near 6.2%.
This marks a notable improvement from one year ago, when the 30-year fixed averaged 6.91% and later surged past 7% in mid-January. The last time rates were this low was in early October 2024.
The 15-year fixed-rate mortgage also declined, averaging 5.44%, down from 5.5% the previous week. Its lowest point this year—5.41%—was recorded in both September and October.
Mortgage News Daily, which tracks rates using a different methodology, reported that rates have been largely unchanged in recent days, placing the 30-year fixed at 6.2% on December 31.
With key economic reports—including the January 9 jobs report and the January 13 inflation data—on the horizon, experts expect mortgage rates to remain fairly stable in the short term.
Affordability remains a challenge
Despite the downward trend in rates, affordability continues to be a major hurdle. Lisa Sturtevant, chief economist at Bright MLS, notes that meaningful improvement will likely require a combination of sustained lower rates, slower home price growth, and rising household incomes over several years.
“Lower mortgage rates certainly help,” Sturtevant said, “but many buyers will still be priced out in 2026.” She added that the monthly payment on a median-priced home remains high, at roughly $2,740.
Signs of a stronger spring market
Even with these challenges, there are early signs of momentum heading into 2026. Joel Berner, senior economist at Realtor.com, suggests that easing rates are already having a positive impact on buyer activity.
“Pending home sales have responded to the rate relief and are helping the market gain traction during what is typically the slowest time of year,” Berner said.
Supporting that trend, the National Association of Realtors reported that pending home sales rose 2.6% year-over-year in November. Since pending contracts usually translate into closed sales within one to two months, this could signal a more active spring homebuying season than seen in the past few years.