Thirty-year mortgage rates fell this week to 6.26%, a small decline from 6.34% the week before, according to U.S. News data. Modest fluctuations in borrowing rates are to be expected at a time when homebuying activity tends to be slow and economic conditions are fairly stable.
In December, the Consumer Price Index measured annual inflation at 2.7%, matching November’s reading. Based on this and other economic data, it’s unlikely the Federal Reserve will lower its benchmark interest rate when it gathers for its next policy meeting in late January.
Generally, the Fed’s actions don’t drive mortgage rates up or down by much. Instead, mortgage rates tend to follow long-term trends like the 10-year Treasury yield, which has been holding steady this January.
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Home Price Gains Persist
Many homebuyers are hoping to see housing prices slide as mortgage rates remain stubbornly elevated. In December, however, the median existing-home price rose 0.4% annually to $405,400, marking the 30th consecutive month of annual gains, according to the National Association of Realtors. December also marked a 5.1% increase in existing-home sales.
“2025 was another tough year for homebuyers, marked by record-high home prices and historically low home sales,” said NAR Chief Economist Lawrence Yun. “However, in the fourth quarter, conditions began improving, with lower mortgage rates and slower home price growth.
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Housing Inventory Remains Light But Could Soon Pick Up
A big challenge homebuyers face this January is limited inventory. NAR reports that total housing inventory fell 18.1% in December compared with the month prior.
December’s 3.3-month supply of unsold homes is well below the five- to six-month supply that typically signals a balanced market. However, there’s reason to believe things will get better.
“Inventory levels remain tight,” Yun added. “With fewer sellers feeling eager to move, homeowners are taking their time deciding when to list or delist their homes. Similar to past years, more inventory is expected to come to market beginning in February.”
Zillow economists have a similarly positive outlook.
“The housing market is finally settling into a healthier state, with buyers and sellers starting to return,” Mischa Fisher, chief economist at Zillow, said in mid-December.
Realtor.com, meanwhile, predicts an 8.9% uptick in active listings in 2026. The group also says, “Momentum in the housing market is expected to tilt toward buyers as a more substantial growth in the number of homes for sale than homes sold shifts the balance of supply and demand.”
That said, homebuyers may not want to sit on their hands and wait for inventory to build. With January typically a slow month for home sales, buyers who enter the market now may be in a position to benefit from decreased competition.
Furthermore, while mortgage rates aren’t expected to fall drastically this quarter, or even this year, a few more modest drops could motivate sidelined buyers to get back in the game.
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Mortgage Rates Fall Modestly in Mid-January originally appeared on usnews.com
