Market Pulse

The 30-year fixed mortgage rate sits at 6.19% according to the daily survey, a hair below yesterday's 6.20%, while the FRED measure holds at 6.15%. The 10-Year Treasury yield remains relatively stable at 4.165%. The Federal Funds Rate continues its gradual decline, now at 3.72%. These factors, along with recent news, suggest a potential shift in the mortgage landscape.

Key Drivers

Recent news highlights a general expectation of mortgage rates trending downward in 2026. This anticipation is primarily driven by the expectation that the Federal Reserve will ease its monetary policy as inflation shows signs of cooling (CPI at 325.031). However, some reports caution that rates may not fall dramatically and could be sensitive to upcoming economic data, particularly the jobs report. A strong jobs report could delay anticipated rate cuts, potentially pushing mortgage rates higher. The market is cautiously optimistic, recognizing that the pace and magnitude of any rate declines will depend on sustained progress in taming inflation and overall economic performance.

Outlook

The near-term outlook suggests a continuation of the current trend: gradual downward pressure on mortgage rates. Keep an eye on upcoming economic reports, especially inflation and employment data, as they will be key indicators of future rate movements. While significant drops are not guaranteed, the overall sentiment points toward a more favorable borrowing environment as 2026 progresses.