NEW YORK, December 29, 2025, 21:06 ET
- Freddie Mac said the average 30-year fixed mortgage rate was 6.18% as of Dec. 24.
- NAR said contracts to buy existing homes rose 3.3% in November, the strongest reading since February 2023.
- Economists say mortgages follow longer-term bond yields, so Fed cuts alone may not pull rates sharply lower next year.
U.S. mortgage rates have edged down to about 6.18% for a 30-year fixed loan, but economists say Federal Reserve rate cuts may not translate into a big drop in 2026.
The issue matters as the housing market heads into the new year with affordability still tight and millions of would-be buyers waiting for financing to ease. The Fed wrapped up 2025 with another quarter-point cut in early December, its third cut of the year, CBS News reported.
Even modest rate moves are showing up in demand. The National Association of Realtors said on Monday that pending home sales — signed contracts that typically turn into closings a month or two later — rose 3.3% in November and were up 2.6% from a year earlier.
Freddie Mac, which surveys lenders each week, said the 30-year fixed rate averaged 6.18% as of Dec. 24, down from 6.21% a week earlier and from 6.85% a year earlier. The 15-year fixed averaged 5.50%.
Homebuyers often assume mortgage rates fall in step with the Fed. Economists told CBS that the relationship is looser because the Fed sets the federal funds rate — an overnight rate banks charge each other that anchors short-term borrowing costs — while mortgages are priced off longer-term bond yields.
Those mortgage benchmarks include the 10-year U.S. Treasury yield, the interest rate the government pays on 10-year debt and a reference point for long-term borrowing across the economy.
Inflation remains the biggest swing factor, said Selma Hepp, chief economist at Cotality. “If inflation continues to cool, bond markets may price in lower yields, helping mortgage rates fall,” she told CBS News.
CBS News said some economists see rates drifting toward the high-5% to low-6% range next year if inflation cools and Treasury yields ease. Redfin’s chief economist Daryl Fairweather and Realtor.com’s chief economist Danielle Hale said they expect a steadier path, with rates likely to hover near current levels.
Rates can also move ahead of — or against — the Fed. NewHomeSource chief economist Ali Wolf said mortgages fell before the Fed started cutting in September and then rose afterward, reflecting shifts in investors’ expectations rather than the policy rate alone.
A Yahoo Finance article published Monday said mortgage rates have hardly budged over the past two months, underscoring how sticky the market has been despite growing bets on easier policy.
The next test for rate expectations comes Tuesday, when the Fed is scheduled to release minutes from its Dec. 9-10 meeting at 2 p.m. ET. Investors watch the minutes for clues on how soon officials might cut again, which can move Treasury yields and, in turn, mortgage pricing.
NAR Chief Economist Lawrence Yun said improving affordability — helped by lower mortgage rates, wages rising faster than home prices and more inventory than a year earlier — is pulling shoppers back. NAR also said 22% of its members expect buyer traffic to rise over the next three months, up from 17% in October.
Lenders say borrowers are adapting rather than waiting for a return to the ultra-low rates of 2020 and 2021. In a Dec. 22 Q&A published by NAR, Bank of America consumer-lending head Matt Vernon said more shoppers are considering adjustable-rate mortgages, which offer lower initial payments but can reset higher later.
For 2026, economists say the inflation path and the labor market will matter at least as much as the Fed’s next quarter-point move. Those forces drive long-term bond yields — and ultimately whether mortgage rates drift lower or stay stuck near 6%.
