What it would take for mortgage rates to dip below 6%

Published on 7 Nov at 9:03 am

Even though the Federal Reserve has cut interest rates twice this year, 30-year fixed mortgage rates are still floating above 6% — where they’ve been stuck since February 2023.

Rates currently sit at an average of 6.37%, per Mortgage News Daily, well above the level where 40% of would-be buyers say they’d feel comfortable purchasing a home, according to a Bankrate survey from early 2025.

Why aren’t mortgage rates falling faster? They follow long-term Treasury yields more closely than the Fed’s benchmark interest rate. And right now, those yields remain elevated.

Why mortgage rates are expected to remain above 6%

Mortgage rates usually sit one to two percentage points above the yield on 10-year U.S. Treasurys, which serve as a benchmark for mortgage pricing.

Over the past few years, that gap — known as the spread — has ranged between 2 and 3 percentage points and now sits around 2.12%, according to HousingWire. While it has narrowed, it’s still wider than normal, keeping mortgage rates relatively elevated.

Part of the reason the spread remains wide is that Treasury yields have stayed elevated. Uncertainty around inflation, new tariffs, the government shutdown and the growing federal deficit has pushed investors to demand higher returns to hold long-term U.S. debt, says Melissa Cohn, regional vice president at William Raveis Mortgage.

Because mortgage rates track the 10-year Treasury yield, not the Fed’s benchmark interest rate, those elevated yields have kept average 30-year mortgage rates above 6% even after two Fed rate cuts.

“In order for [30-year mortgage] rates to get to 5.5%, then the 10-year bond yield would have to go to 3.5% if the spread is still 2%,” says Cohn. That scenario isn’t reflected in current outlooks.

Where mortgage rates are expected to go in 2026

Most forecasts don’t expect rates to fall much further. “There is not a lot of evidence that we’ll see rates go much lower in the near term,” Cohn says.

Here’s where recent forecasts see the average 30-year fixed mortgage rate in 2026:

Mortgage Bankers Association: 6.4% by the end of 2026

National Association of Home Builders: average of 6.23% in 2026

National Association of Realtors: average of 6% in 2026
Fannie Mae: 5.9% by the end of 2026

These projections could shift downward if the economy slows, since weaker conditions typically pull investors into safer assets and push down yields. A complicating factor is the government shutdown, which has made reliable economic data harder to come by.

Even so, Cohn says recent labor-market data points to a slowing economy. But so far, it hasn’t pushed mortgage rates down.

“Bond yields would have to drop significantly in order to see a drop in mortgage rates [below 6%],” she says.

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