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Trying to predict the housing market is like trying to guess the weather. But understanding how mortgage rates react to other markets and, sometimes more importantly, other market sentiment can make it easy to navigate the market and time rate dips to your advantage. This was especially true for the market in 2025. Rates gradually declined throughout the year, but there were specific windows when informed buyers and homeowners took advantage of rates at or near annual lows. It’s likely to be true for the 2026 housing market as well, which is shaping up to be normalized and opportunity-driven rather than one that crashes or booms. Federal Reserve Policy and Mortgage Rates Why the market moves and why rates can feel jumpy at times One of the biggest misconceptions regarding the housing market is that mortgage interest rates only move when the Federal Reserve cuts or hikes the fed funds rate. In reality, mortgage rates move in a slow dance with other markets, especially the 10-year Treasury yield, and those markets react more to expected Fed policy than they do to actual Fed action. That’s exactly what we saw in 2025. Before the September and October Fed Meetings (which featured our first two federal funds rate cuts of the year), mortgage rates improved in the weeks leading up to those meetings, then became choppy or even moved higher after the decisions were announced. The two drivers that matter most for Fed policy and the expectations that move rates are inflation and the labor market. Inflation has risen slowly this year, but the Fed believes this is likely due to a one-time price adjustment resulting from President Trump's tariff policies. On the other side, the labor market has been a primary concern for the Fed. Its slow deterioration this year was cited as the primary reason behind each of 2025's three fed funds rate cuts. The Bureau of Labor Statistics (BLS) reported that the unemployment rate rose to 4.6% in November, the highest level since September 2021 and 0.6% since the start of the year. Monthly nonfarm payroll reports from the BLS also posted negative month-over-month growth three times in 2025, a first since 2020, with the December jobs numbers still to come and the October & November reports likely to be revised. In the Fed’s December 2025 press conference, Chair Jerome Powell acknowledged the weakness in the labor market, saying, “the labor market has continued to cool gradually, maybe just a touch more gradually than we thought,” in relation to rising unemployment and negative data from the BLS. Regarding the job market in 2026, he said there are several downside risks to the economy if these trends continue, which means forecasts today can change with the data we receive tomorrow. For weekly updates on the jobs data and how it impacts mortgage rates throughout 2026, make sure to watch UMortgage’s Monday Market Update every week at 10:30am ET. Where Rates Could Head in 2026 Dates and headlines that could shift the needle this year So, understanding the internal and external factors that drive the markets, how are mortgage rates expected to move in 2026? Judging by the Fed’s dot plot, which is a chart where each “dot” represents an individual Fed policymaker’s projection for where rates could go, we should see overall stability with the potential for slight easing. A realistic working range is between 5.75% and 6.5% throughout the year, with relief appearing in waves rather than in a straight line. Those waves will provide windows to refinance to a lower monthly payment, get buyers off the sidelines, and slowly ease the lock-in effect. The biggest variable that can either drive or change these expectations is the Fed’s dual mandate: low inflation and a healthy job market. If the labor market continues to deteriorate, meaning unemployment rises and job growth slows faster, markets may start to price in more cuts. That can push rates down faster, but also create uncertainty for buyers who would rather take a “wait and see approach.” On inflation, if the one-time impact of tariffs fades as the Fed expects, or if tariff policy is rolled back/removed through political or legal channels, inflation should begin to cool, giving the Fed more room to ease. The final factor to watch in 2026 is the Fed itself. The voting composition will rotate in January, with four Fed policymakers assuming responsibilities from their colleagues. A new Fed Chair will lead the post-meeting press conferences starting in May as well; President Trump’s nominee is expected to be announced in January 2026 When markets expect new decision-makers to lean hawkish or dovish, expectations can shift, and mortgage rates can follow suit. So once again, this market will favor those who keep their finger on the pulse. Housing Inventory, Demand, and Prices How a more stable market impacts homebuyers and homeowners looking to move up or refi More stability with mortgage rates should get more homebuyers off the sidelines. Even if rates aren’t ‘low,’ stability brings confidence back to both sides of the transaction and helps people feel comfortable making big moves again. That’s the secret to unlocking the housing market. One of the most positive housing stories of 2025 was the rise in housing inventory. We saw 5-year highs for active single-family housing inventory, and during the market’s peak in the summer, inventory ran about 33% higher year-over-year. More inventory means a more balanced market, which is better for everyone involved. This should lead to fewer panic offers, more negotiation, and cleaner deals where buyers and sellers can actually meet in the middle. As affordability improves even modestly (especially if rates dip below 6% at points), more buyers will be able to get involved in the market. This is also where “move-up” buyers come back into play. When the payment math gets easier, those life-driven moves start to become more common. On home prices, the FHFA’s home price index showed year-over-year price growth at 2.2% nationally in Q3 2026. That slow-and-steady pace of growth is projected to continue, with Fannie Mae’s Home Price Expectations Survey suggesting around 2.8% growth in 2026. Just like in 2025, 2026 looks like a market that will favor the pros who can explain the market clearly and help clients act when it makes sense. If you want to stay plugged in as these trends develop, tune in to UMortgage’s Monday Market Update every week at 10:30am ET. We’ll break down the news and data that drive rates and help you sound like the expert your clients are looking for.

As expected, the Federal Reserve cut the federal funds rate by 0.25% last week. What wasn’t expected, though, was the stance taken by Fed Chairman Jerome Powell during his post-meeting press conference. Powell was much softer on the labor market than expected and cited that inflation is mainly contained to industries impacted by tariffs. For rates to keep dropping, inflation will need to slow, and the jobs market will need to keep shrinking. We’ll get to see the current state of the labor market and inflation this week with our October & November Bureau of Labor Statistics (BLS) reports tomorrow morning and the Consumer Price Index (CPI) inflation report for November coming on Thursday. As always, labor data has more influence on mortgage rates; if we see continued poor labor market growth, we could see interest rates go lower this week. Last Week's Mortgage Rate Recap Rates Dropped Slightly The big economic headline from last week was the Fed’s decision to cut the fed funds rate for the third meeting in a row. Markets expected this cut but didn’t anticipate Powell's dovish outlook on the economy in his post-meeting press conference. After the cut, Powell said that “the labor market has continued to cool gradually, maybe just a touch more gradually than we thought,” and that the economy “doesn't feel like a hot economy that wants to generate a Phillips curve kind of inflation.” These remarks brought the 10-year Treasury yield sharply lower on Wednesday, before it fluctuated back to the upper level of resistance on Friday. This Week's Mortgage Rate Forecast Rates Could Be Volatile We have a massive week ahead with some pivotal data that could drive one final rate swing before the new year. It all kicks off tomorrow morning with the release of our October and November BLS jobs reports. Markets expect the report to show 40,000 jobs created in November; as always, if the reported figure is lower, rates should drop. We’ll also want to see if previous months’ numbers are revised lower, especially after Powell made the following statement regarding the BLS’s numbers last week: “Payroll jobs averaging 40,000 per month since April. We think there's an overstatement in these numbers by about 60,000. So that would be negative 20,000 per month.” We will also see our November CPI inflation report on Thursday. Notably, the Fed members who favored either a rate hike or a pause in additional cuts cited elevated inflation as justification for their votes last week. As Powell has said, much of this year’s inflation can be attributed to goods impacted by tariffs. Regardless, we will want to see a flat CPI print to avoid upward pressure on rates. If you’re interested in how this data or last week’s Fed Meeting affects the market outlook for next year, register here for UMortgage’s 2026 Housing Market Predictions presentation happening this Wednesday, December 17th, at 2pm ET. If you have any questions or want some real-time market analysis from a mortgage expert, follow this link to connect with a UMortgage Loan Originator near you!

If you’re like many homeowners holding off on refinancing because you don’t want to lose your low mortgage rate, it might be time to look at the bigger picture. Yes, rates aren’t what they were a few years ago. However, credit card debt is at record highs, with average interest rates north of 20%. For households juggling thousands in revolving debt, it’s not the mortgage rate that’s crushing monthly cash flow; it’s those high-interest minimum payments. If you’re feeling financially squeezed, loan products like a cash-out refinance or home equity line of credit (HELOC) can help you take control by using your home’s equity to consolidate debt and reclaim hundreds, sometimes thousands, in monthly breathing room. Brian Cardenas, UMortgage Loan Originator, has been using these strategies to save his clients hundreds of dollars per month. “Money is one of the biggest stressors that we experience in our lives,” said Cardenas. “People are sitting on a ton of equity and a really low interest rate on their home. But they also have this albatross around their neck of this high-interest debt that’s just crushing them.” According to the Federal Reserve Bank of New York, total outstanding credit card debt stood at approximately $1.21 trillion by the end of Q4 2024 – a $45 billion increase from the prior quarter, marking a 7.3% year-over-year rise. At an average APR of 21.37%, as reported by the Federal Reserve in February 2025, that extra debt adds up fast. With a cash-out refi or HELOC, you’re using the money you’ve already invested in your home instead of taking on more debt with high-interest credit cards or personal loans. Here’s how each works, so you know your options before you commit. What is a Cash Out Refinance and How Does One Work? A cash-out refinance allows homeowners to replace their current mortgage with a new loan that provides extra funds by tapping into the equity homeowners have built in their property. Essentially, homeowners can "cash out" a portion of their equity to use as they see fit. This process works by allowing homeowners to borrow against their home equity, which is the difference between the home’s appraised market value and the remaining mortgage balance. By taking out a larger loan, the borrower receives the excess in cash after paying off the original mortgage. For a clearer picture of how this can work, use UMortgage’s Refinance Calculator to see what a cash-out refi might look like for you. See our Cash-Out Refinance loan product page to learn more. What is a HELOC Loan and How Does One Work? A Home Equity Line of Credit (HELOC) is a loan that lets you borrow against your home’s equity without replacing your existing mortgage. Think of it like a credit card that can be used, repaid, and used again over time. This flexible borrowing option is based on the difference between the home’s current market value and the outstanding mortgage balance. Homeowners can draw from the line of credit as needed, whether for home improvements, debt consolidation, or other significant expenses, and only pay interest on the amount they use. See our HELOC loan product page to learn more. Why You Should Consult with an Expert Before You Act Accessing your equity is just like any other mortgage product: there’s no one-size-fits-all option. That’s why it’s so important to consult with a mortgage expert before you pull the trigger. Working with a UMortgage Loan Originator takes out the guesswork; you’ll have someone in your corner who will present you with all your options so you can make an informed decision that works best for your financial future. “After crunching all the numbers, I found out that there were some considerable savings that we can present to this borrower and help relieve some of the financial burdens that they’re experiencing every single month,” said Cardenas regarding a client whose debt he consolidated earlier this year. “We’re just simply presenting options and letting the consumer decide which, if any of these options, is going to fit their needs best.” If you want to discover your options to consolidate your debt with your home’s equity, or learn more about HELOC rates, fill out this form to connect with a UMortgage Loan Originator in your area. They’ll reach out shortly after you submit to start the process.

The holiday season is approaching, and for many, this time of year can put families under financial strain. Between gifts, travel, and festive gatherings, the expenses can quickly add up, leaving some feeling stretched thin. For homeowners, a cash-out refinance can be an effective way to access home equity, providing extra funds to cover holiday costs without relying on high-interest credit cards or personal loans. By using the equity they've built, homeowners can enjoy a more relaxed and financially stable holiday season. What is a Cash-Out Refinance and How Does One Work? A cash-out refinance allows homeowners to replace their current mortgage with a new loan that provides extra funds by tapping into the equity homeowners have built in their property. Essentially, homeowners can "cash out" a portion of their equity to use however they like—whether it’s to pay off high-interest debt, fund renovations, or, in this case, cover holiday expenses. This process works by allowing homeowners to borrow against their home equity, which is the difference between the home’s appraised market value and the remaining mortgage balance. By taking out a larger loan, the borrower receives the excess in cash after paying off the original mortgage. For a clearer picture of how this can work, use UMortgage’s Refinance Calculator to see what a cash-out refi might look like for you. For a more in-depth quote, fill out this form to connect with a UMortgage Loan Originator or reach out to your existing UMortgage partner. Home equity is a valuable asset that accumulates over time as mortgage payments are made and property values appreciate. With a cash-out refinance, homeowners can leverage this value without selling their property, providing access to funds when needed most. The Benefits of a Refi for Debt Consolidation & Holiday Spending While credit cards might seem like a tempting way to cover holiday expenses, the high interest rates can quickly make seasonal spending hard to manage. According to the Federal Reserve, the average credit card interest rate is currently around 22.76%, which can lead to a cycle of unmanageable debt. “There’s a lot of high interest out there, and people are carrying more debt than they’ve ever carried,” says Jimmy Hobson, UMortgage’s National Sales Leader. “A cash-out refinance not only helps you avoid this kind of debt but also gives you a way to tap into your home’s equity that you’ve already built through monthly mortgage payments.” With a cash-out refi, instead of taking on even more debt, you’re using the money you’ve already invested instead of relying on high-interest credit cards or personal loans. After you’ve closed your refinance, you'll get some breathing room before your first mortgage payment, typically due on the first of the month following a full 30 days after closing. For example, if you close on November 14th, you won’t make your first mortgage payment until January 1st. This means you could benefit from a month without a mortgage payment, freeing up extra funds for holiday spending or unexpected expenses. How to Know You’re Eligible for a Cash-Out Refinance Before you start planning your refinance, assess your eligibility and whether it makes sense for your current financial picture. Here are some things to consider: Assess Your Home Equity You should start by calculating your home equity to determine if you qualify for a refi. Your equity is the difference between your home’s current market value and what you still owe on your mortgage. You’ll need an appraisal to determine your home’s market value. A UMortgage Loan Originator will be able to connect you with a reliable appraiser in your area to help you determine the equity owned on your home. Reviewing Your Long-Term Goals There are many benefits to a refinance, but ultimately, you should only do it if it fits your long-term goals. Would it be more beneficial to use your home’s equity to invest, make home improvements, or save for the future? Taking out funds now can affect your mortgage balance and monthly payments, so consider how it aligns with your plans and whether it will keep you on track to achieve financial stability or growth. Get Connected with a UMortgage Loan Originator A UMortgage Loan Originator is your key to personalized mortgage advisory that puts your long-term financial health first. Once you connect with your LO, they’ll walk you through every step, from eligibility to planning, and ultimately unlock your home’s potential, giving you a smart, effective option for covering seasonal expenses. Follow this link and fill out the form to get connected with a UMortgage LO in your area. A cash-out refinance lets you tap the equity you've already built in your home, helping cover seasonal expenses while keeping your financial health in check. Whether for gifts, travel, or end-of-year projects, using your home’s value wisely can make all the difference in enjoying a stress-free holiday season. Follow the link above to see if this option will work for you this holiday season!