06/18/2026
Will will see lower interest rates in 2026?
Before I dive too deep into this topic, it should be noted that predicting interest rates is extremely difficult at the moment. However, the big news of the week is tensions in the middle east are declining and we are already seeing a decrease in energy prices. But how does that effect the real estate market?
Without getting too much into the weeds and making a bold prediction, I'd like to focus on what factors to keep an eye on in the coming months. Energy prices play a large role in inflation. With energy prices decreasing, in theory we should see inflation numbers begin to trend downward. Mortgage rates are heavily influenced by the 10-year treasury yield. Lower inflation expectations tend to push investors to buy bonds, which pushes treasury yields lower. Mortgage-backed securities generally speaking follow those yields. Lower treasury yields typically means lower mortgage rates. There are many other factors that contribute to inflation, but we are at least seeing a major component moving in the right direction.
I will be keeping my eye on the next inflation reports (CPI). If energy prices continue to fall between now and mid-July, the July 14 CPI report could show cooler inflation. The market will want to see several months of cooling inflation before making changes. If this trend continues, we should see eventually see lower mortgage rates.
I always recommend doing your own personal research on this topic. I highly recommend speaking with a mortgage lender as well. From a realtor standpoint, I have been preaching this for years now. Do not wait until mortgage rates to drop before purchasing. If the your payment is affordable at current rates, refinance later when mortgage rates decrease because in all likelihood, home prices will continue to rise like they have been. Buy at today's price, and tomorrow's rate.
This is a lot of information to digest, if you'd like to discuss further, contact Nick:
📱 815.258.1471
💻 [email protected]
Rife Realty
