2026 mortgage rates set to change: Will Warren Buffett’s Berkshire Hathaway prediction give the housing market the relief it needs?

Mortgage rates in the United States are expected to slowly decline over the next two years, with leading economic forecasts pointing to a return to the 6% range by 2026. The projections come amid signs of easing inflation, shifting Federal Reserve policy, and a changing housing market landscape — factors that could reshape affordability for millions of buyers.

How low are mortgage rates expected to go by 2026?

According to Fannie Mae, the average 30-year fixed mortgage rate is projected to hit 6% by the third quarter of 2026, in line with expectations of a softer economy and more moderate inflation. The National Association of Home Builders (NAHB) is slightly more optimistic, predicting rates could dip below the 6% mark — averaging around 5.98% by the end of 2026.

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However, not all forecasts are quite as bullish. Berkshire Hathaway analysts expect rates to remain elevated in the near term, noting they could inch toward 6% in 2025 but likely stay between 6.5% and 7% through the end of 2025.

What’s driving the projected decline in rates?

Several economic indicators are working in tandem to push rates lower. The biggest factor is inflation, which has cooled significantly compared to its 2022 highs. Should that trend continue, the Federal Reserve could begin cutting its benchmark interest rates, which would indirectly ease mortgage borrowing costs.

Economic growth is also slowing. Some analysts warn of a possible mild recession in late 2025 or early 2026, which historically has led to rate cuts. Additionally, the housing market itself is undergoing a shift. As more Baby Boomers downsize and list properties, housing inventory could rise, reducing competitive bidding and easing upward pressure on home prices and rates.

Where do rates stand right now?

As of early August 2025, the average 30-year fixed mortgage rate sits around 6.63%, while the 15-year fixed rate averages 5.75%, according to The Mortgage Reports. These figures are down from last year’s peak but still above pre-pandemic lows, when rates dipped below 3%.

Should buyers wait for rates to drop?

While the idea of securing a mortgage at 6% or lower is appealing, experts caution against assuming lower rates will necessarily make buying easier. Home prices remain on an upward trajectory, driven by strong demand and limited long-term housing supply.

“If you’re financially prepared and find a home that meets your needs, buying now could still be the right decision,” financial analysts told Investopedia. “Future refinancing could lower your payments once rates come down, but waiting too long could mean paying more for the home itself.”

For now, mortgage rates are trending lower — but the path to 6% will likely be gradual, not sudden. Economic conditions, inflation data, and Federal Reserve policy decisions over the next 18 months will be key to determining just how low rates can go.

Buyers weighing their options may face a familiar dilemma: wait for potentially cheaper borrowing costs or act before rising home values outweigh any interest rate savings. Either way, experts agree the coming years could offer a more favorable lending environment compared to the highs of 2023 and 2024.

FAQs:

Q1: What are the predicted mortgage rates for 2026?
Experts, including Warren Buffett’s Berkshire Hathaway, forecast mortgage rates to trend around 6% in 2026, signaling a potential decline from current higher levels.

Q2: Why are mortgage rates expected to drop to 6% by 2026?
Factors such as easing inflation, potential Federal Reserve rate cuts, and a cooling economy are likely to contribute to mortgage rates gradually falling back to around 6%.

Q3: How will these mortgage rate changes impact the housing market?
Lower mortgage rates generally improve affordability, encouraging more buyers to enter the market, which could stabilize or boost home sales after recent slowdowns.

Q4: Should I wait until mortgage rates drop before buying a home?
While waiting for rates to hit 6% might seem appealing, rising home prices and inventory changes mean buyers should weigh their financial readiness and local market conditions carefully.

Q5: What role does Berkshire Hathaway’s prediction play in mortgage trends?
As a major investor and real estate player, Berkshire Hathaway’s forecasts often reflect broader economic expectations and can influence market sentiment about future mortgage rates.