Market Signals Point to Continued Rate Swings Through 2026
Zillow and other major real estate platforms are signaling continued mortgage rate volatility heading into 2026. While Zillow doesn’t offer a precise forecast for mortgage rates two years out, the company has highlighted that conditions remain unpredictable. Current data suggests that mortgage rates may stay in the mid-6% range through the end of 2025, with some potential for modest declines in 2026.
Organizations such as the Mortgage Bankers Association, Fannie Mae, and the National Association of Realtors all project that mortgage rates will hover between 6.25% and 6.75% for much of 2026. A few forecasts predict a slight dip below 6.25% by the end of that year, but none anticipate a return to the ultra-low rates seen during the pandemic. In fact, some economists, like Thomas Ryan of Capital Economics, expect rates to remain near 7% for most of 2025 and then gradually decline to around 6% in 2026.
The consensus is clear: volatility will define the mortgage rate landscape in 2026. While short-term dips are possible, buyers should not expect dramatic or sustained decreases.
What Rate Volatility Means for Homebuyers
In a volatile rate environment, timing becomes critical—but so does preparation. Buyers who wait for the “perfect” rate may miss out on favorable windows. Mortgage rates can change week to week, and market reactions to economic news often drive unexpected rate spikes or drops.
This is where LBC Capital provides real value. We understand that trying to predict the bottom of the market is risky. Instead, we focus on helping clients prepare to act when the right opportunity arises. Whether you’re a first-time homebuyer or an investor, being mortgage-ready before rates dip allows you to move quickly and secure a more favorable long-term loan.
If you’re waiting on the sidelines for rates to drop significantly, you’re not alone. Many buyers are hoping for a return to sub-5% rates. But historical data shows this is unlikely. The Federal Reserve has indicated it will not return to ultra-low interest rate policies unless there is a major economic downturn. In the absence of such an event, rates are expected to remain in the 6% range for the foreseeable future.
That’s why waiting could backfire. If rates stay steady—or rise—you may face higher home prices and more competition. In many housing markets, inventory is slowly improving, but demand remains high. As rates fluctuate, we may see temporary increases in buyer activity, driving prices up even if borrowing costs temporarily decrease.
The Advantage of Being Mortgage-Ready
LBC Capital ensures our clients are ready to move whenever conditions shift in their favor. Getting pre-approved now, even if you’re not ready to buy immediately, puts you in a position of strength. You’ll be able to act quickly when a rate dip happens, rather than starting the mortgage process from scratch.
Pre-approval also signals to sellers that you’re serious. In a competitive market, that can make the difference between getting the home you want or missing out.
We also work with our clients on refinance strategies. If you buy now and rates drop in 2026, we’ll help you refinance to secure a better rate. This flexible approach allows you to benefit from today’s opportunities while still taking advantage of future rate changes.
Unlike other lenders, LBC Capital doesn’t just approve loans—we help you plan for the full life of your mortgage. Our team tracks economic trends and rate forecasts daily. That means we can help you anticipate market changes and make informed decisions based on real-time insights.
Understanding the Risk of Waiting
While it may seem wise to wait for lower rates, there are real risks in doing so. If rates hold steady or rise, you could end up paying more in the long run. Additionally, as rates drop—even modestly—competition in the housing market tends to spike. More buyers enter the market, bidding up home prices.
Zillow data shows that markets with falling mortgage rates often see a surge in demand. That demand can erode any savings from the rate drop. In some cases, buyers end up paying more overall because of increased home prices, even if their rate is slightly lower.
By contrast, buying when demand is softer can lead to better pricing, fewer bidding wars, and more negotiating power. And with LBC Capital’s refinancing support, you’re not locked into today’s rate forever. You can improve your terms later when the time is right.
What Zillow and Other Experts Recommend
Zillow recently updated its home price forecasts for more than 400 markets nationwide. The company now expects price growth to slow in many regions, largely due to affordability constraints and shifting buyer behavior. This forecast suggests that buyers who are ready to act in the next 12–18 months may find more favorable price conditions—even if rates remain in the mid-6% range.
Other platforms like Realtor.com and Redfin also predict slower home price appreciation through 2026, especially in areas where inventory is increasing. That presents an opportunity: buyers who are prepared with financing can take advantage of softening prices before competition increases again.
LBC Capital helps clients identify emerging markets and areas where value opportunities are growing. We don’t just provide loans—we offer market insight and strategic guidance based on current data.
How LBC Capital Prepares You for Rate Movement
At LBC Capital, we offer personalized service that goes beyond traditional mortgage lending. We help you:
- Get pre-approved quickly, so you can act the moment rates drop
- Understand the total cost of homeownership, not just the interest rate
- Evaluate refinance options for when better rates become available
- Find loan programs that fit your financial goals
We also stay in constant communication with our clients. Whether you’re six months from buying or just starting to explore options, our team is here to guide you every step of the way.
We believe that preparation is the best strategy in a volatile market. When rates dip, those who are ready benefit most.