What to expect for mortgage interest rates in 2026

11 Apr What to expect for mortgage interest rates in 2026

What to expect for mortgage interest rates in 2026

We came into 2026 with high expectations that rates would come down this spring and summer to as low as 5 percent.

But then a number of things happened…tariffs added inflationary pressures to our economy and the Federal reserve was hesitant to lower rates until they could see the full effect on our economy and prices. Then with ICE actions it created uneasiness in the country and financial markets. But now with the war in Iran and gas prices up dramatically this directly effects prices of groceries, construction materials and other items consumers buy. Our inflation figures came out last week and they were up to 3.3% in March and that is up from 2.4% in February.

Our mortgage rates in the Twin Cities were about 5.75% before the war and now sit at about 6.25%. The financial markets do not like global uncertainties and perform better in times of calm leadership of the US government.

With inflation going up, instability in financial markets, the war in Iran that is causing gas inventories to shrink and prices to rise, and a daily change in our leadership statements on many topics that creates anxiety financial market do not expect the Federal Reserve to lower interest rates in 2026. Unless all the things I previously mentioned send us into a recession in the US and globally.

Jeff Anderson

The Anderson Team

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