What it would take for mortgage rates to dip below 6%—and what to expect in 2026

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.

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.