Mortgage rates will remain elevated through 2026 due to geopolitical tensions

Mortgage rates will remain elevated through 2026. This is the consequence of geopolitical tensions that have increased oil prices, pushing inflation higher than previously expected. The Mortgage Bankers Association predicts inflation will reach closer to 4% by the end of 2026, up from an original forecast of 3.2%. Because of these inflation risks, the Mortgage Bankers Association has removed expectations for Federal Reserve rate cuts this year. The federal funds rate is expected to remain in the range of 3.5% to 3.75% with little movement anticipated into 2027.