Mortgage Rate Predictions 2025–2026: Will Relief Be Coming Soon?

Will mortgage rates drop enough in 2025–2026 to offer real relief to buyers, especially VA borrowers and homebuyers in San Antonio–New Braunfels?

Snippet answer:
Most experts expect mortgage rates to stay firmly in the mid-6 percent range through 2025, with gradual easing into the 5.5–6.0 percent zone by late 2026—though conditions like inflation, the 10-year Treasury yield, and Fed cuts will determine the slope.

Why 2025–2026 matters more than “next month”

When buyers ask, “What’s mortgage going to do next quarter?” that’s useful. But more often, what matters is whether rates will meaningfully shift over a 12–24 month window. Will borrowing costs finally fall enough to unlock more affordability? That’s the question for 2025–2026.

Rates don’t move in a straight line: they react to inflation data, monetary policy, geopolitical risk, Treasury yields, and demand for mortgage-backed securities. Forecasts often revise as those forces shift. But by comparing major outlooks side by side, you can see emerging patterns and best-case vs. base-case scenarios.

Expert forecasts at a glance

Here’s how leading institutions see 30-year fixed mortgage rates evolving:

Key takeaways from the forecast table

• 2025 will likely remain tough — most forecasts cluster in the mid-6 percent zone.

• 2026 is where buyers hope to see relief. But only in optimistic conditions might rates dip meaningfully below 6 percent.

• Expect volatility. Even if the trend is downward, there will be months where rates edge higher again depending on macro data (inflation, jobs, Treasury yields).

• VA rates may track similarly, but with slight spreads.

Special focus: VA loan rates & projections

VA (Veterans Affairs) loans are a key vehicle for many buyers, and VA borrowers often benefit from lower spreads, fewer fees, or streamlined refinancing (IRRRL). So how might the forecast apply to VA?

Current VA rate snapshot

• As of late September 2025, the average 30-year fixed VA purchase rate sits around 5.50 % (APR adjusted) Veterans United Home Loans

• Some rate aggregators show VA 30-year fixed rates closer to 6.45 % in national averages, depending on credit and lender assumptions. Bankrate

• VA mortgage hubs report that over recent months, fixed VA rates have fluctuated in the 6.0 % to 6.75 % band for many borrowers. VA Mortgage Hub+2VA Mortgage Hub+2

VA rate outlook in 2025–2026

• Analysts suggest VA rates will likely move in parallel with conventional 30-year rates, but may stay slightly more favorable for strong-credit borrowers.

• With conventional 30-year forecasts moving from ~6.4% down toward ~5.9% in 2026 (per Fannie Mae), a corresponding VA 30-year fixed rate might drift into the 5.8 %–6.2 % zone, depending on spread and lender pricing.

• Because VA loans often allow lower fees and easier refinancing, the “effective rate” for VA borrowers may outpace conventional easing.

Bottom line for VA borrowers: You might not see dramatic drops immediately. But if 30-year conventional rates push below 6.0% in 2026, VA could follow — and you’ll want to be ready to refinance (via IRRRL) or lock when the move begins.

What drives this “relief window”?

Here are the levers and risks that will decide whether 2026 brings serious mortgage relief:

🎯 Key drivers

1. Inflation and Fed policy
   The Federal Reserve’s moves play a central role. If inflation continues falling, the Fed may feel safer cutting rates — which tends to drag mortgage yields lower. Forecasts that assume falling inflation tend to predict the biggest mortgage rate declines. Investopedia+2Forbes+2

2. 10-year Treasury yield
   Mortgage rates closely follow the 10-year Treasury yield. If demand for Treasuries remains strong, that yield may stay low. But if government borrowing pressures or inflation risk push it higher, mortgage rates may struggle to fall. Fannie Mae+3Yahoo Finance+3Investopedia+3

3. Mortgage market and investor demand
   How strongly investors continue to buy mortgage-backed securities (MBS) affects the “spread” between Treasuries and mortgages. In times of stress, that spread can widen, negating some downward pressure. Investopedia+1

4. Economic growth, jobs, and credit conditions
   If the economy slows, rate cuts may accelerate. But if job growth or wage inflation is too strong, the Fed may stay cautious. Also, tighter credit or higher risk premiums could dampen the full benefit of rate cuts.

5. Regulatory and structural changes
   Things like underwriting rules, GSE policies, or changes in capital requirements can influence mortgage pricing. While harder to forecast, they sometimes cause asymmetrical effects.

⚠️ Key risks & caveats

• Sticky inflation or unexpected shock events (energy prices, global recession, supply chain disruptions) could delay relief

• Volatile Treasury yields may override softer inflation trends

• Forecast revisions are common: last year’s “cut prediction” often gets pushed back

• Spread widening if credit risk or capital constraints rise

• Regional divergence: markets like San Antonio–New Braunfels may show variation due to local demand, competition, or appraisal trends

What it means for San Antonio–New Braunfels homebuyers

You’re not just watching national averages — your buying power and timing matter locally. Here’s how this forecast might translate in your area:

• If 30-year fixed rates drop from mid-6% → ~5.9%, monthly payments on a $300,000 loan could fall by ~$50–$70/month (excluding taxes/insurance). That’s modest, but meaningful for budget-conscious buyers.

• The value of timing increases as rates fall: locking earlier vs. waiting might yield a small savings, but waiting too long risks rising competition or price increases.

• Local competition may accelerate when rates dip, reducing inventory or driving prices upward — so “rate relief” can be partially offset by market pressure.

• For VA borrowers in San Antonio area: keep an eye on local lenders’ spreads, and be ready to act or refinance when the trend turns.

Strategy advice: buy now, wait, or hedge your timing?

Given the forecast and volatility, here’s a strategic framework you can share with clients:

Advice for VA borrowers: Because of VA’s streamlined refinance options (IRRRL), you may be better positioned to lock early and refinance when the downward trend solidifies. Don’t wait for the “perfect bottom” — when the direction gets clear, move.

Final thoughts & local call-to-action

• The consensus: 2025 likely stays in the mid-6% zone, offering limited relief

• The hopeful move: 2026 holds the best chance for mortgage rates to slip meaningfully toward 5.8 %–5.9 %

• But it’s not guaranteed — inflation persistence, Treasury yields, and credit spreads could delay or flatten the descent

• For VA borrowers, the path may mirror conventional rates but with structural advantages (lower spread, IRRRL options)

• Locally in San Antonio–New Braunfels, timing your lock, being ready to act, and watching competition are crucial

If you want help modeling how a 0.25% or 0.50% drop in rates affects your monthly payments or how it changes your purchasing power, let me know—I'd be happy to build that for San Antonio area loans.

Let’s connect. If you’re thinking about buying or refinancing, message or schedule a call with me, Cody Posey, REALTOR in San Antonio–New Braunfels. We’ll review your options and pick a rate-lock strategy tailored to your risk tolerance and timeline.