Year-End Market Check: What’s Really Happening with Rates

Interest rates hit their lowest point of the year, with many options dipping below 6%. Combined with newly announced 2026 conforming loan limits and more flexible credit score requirements, buyers are seeing more affordable financing opportunities than they have in years.

While the Fed just announced a rate cut yesterday, it’s worth remembering that mortgage lenders have already priced in those expectations, so this cut won’t translate directly into even lower mortgage rates today. How about the predictions that mortgage rates will drop further in 2026? Well, despite the possibility of another Fed rate cut in 2026, economists aren’t predicting drastic mortgage rate drops to follow. As Realtor.com chief economist Danielle Hale explains, “While this may be disappointing to buyers hoping for even lower rates, mortgage rates are expected to be low enough to offset price gains, causing the monthly cost of buying a home to drop in 2026 for the first time since 2020 even as home prices rise.”

One more thing to keep in mind: if rates do fall sharply, competition will likely surge and push prices higher, which can make buying more expensive overall. Even with a slightly softer market in 2025, home values in the DMV continue to rise, and steady growth is expected into 2026.

If you’re curious how today’s rates might shape your plans, we’re always here to chat and can connect you with a trusted lender whenever you’re ready.

Worth The Read from the National Association of Realtors: "December's Market Dynamics: Sales, Inventory, and Buyer Trends