The mortgage market has been quite challenging over the last five years. Rates were elevated, refinance activity was low, and affordability struggles kept both buyers and sellers on the sidelines.
While 2026 isn’t expected to bring in ultra-low rates, mortgage experts do predict a positive shift. Rates are predicted to stabilize. Affordability concerns may ease as incomes begin to rise faster than home prices. And overall, the housing market looks to swing from its longtime reactive state to a more proactive one.
To help us understand the mortgage forecast for 2026, we asked Michelle White, The CE Shop’s Director of Real Estate Services Experts and a national mortgage expert, to share her thoughts. Read on as we unpack major predictions while Michelle sheds light on resulting opportunities for mortgage loan originators.
Mortgage Prediction #1: Rates to Stabilize Between 5 and 6%
According to Rocket Mortgage’s roundup of mortgage predictions, interest rates will likely hover on the low end of 6%, potentially falling to the high 5s by the end of 2026. This range is widely considered the “new normal,” compared to the rock-bottom rates seen in 2020 and 2021.
MLO Opportunity: Educate Your Clients on Realistic Rate Fluctuations
Amidst ongoing rate shifts, Michelle sees an opportunity for MLOs to help demystify rate fluctuations for clients and set realistic expectations for rate reductions.
“MLOs should help borrowers understand that the 2-4% interest rate range from years ago is not likely to return, possibly ever,” Michelle says. “And if borrowers don’t accept that reality, they may wait so long for the lower rates that they will completely miss the opportunity to buy a home. Loan officers can explain that the best time to buy is when you can afford something you like.”
Michelle adds that it helps when MLOs and other real estate professionals familiarize themselves with rate cycles, how they work, and what they’ve been in recent years.
“Sharing that bigger picture with prospective homebuyers helps them understand how all the pieces come together to guide rate reductions,” she says. “Try using visuals to educate your clients as well. Showing buyers a chart or graph of rates that shift over time is a great touch to help them understand the landscape."
Mortgage Prediction #2: Purchases Lead, Refinances May Slowly Rebound
Zillow predicts 4.26 million existing home sales in 2026, which is a 4.3% increase in 2025’s projected total. Why this projection? Well, after years of high mortgage rates and limited home inventory — alongside easing affordability challenges — buyers are ready to make moves. Home purchases will drive most deals in 2026 while refinances may begin to steadily rebound.
MLO Opportunity: Help Eager Buyers Weigh All of Their Financing Options
As affordability struggles begin to improve, MLOs can help buyers better understand the complete picture of home financing. This often doesn’t just include traditional financing loan options. There are creative financing solutions to consider as well as opportunities to negotiate with sellers for reduced closing costs, mortgage point buydowns, and more.
Michelle shares that MLOs who educate as well as facilitate the logistics of financing are growing in demand.
“Some industry experts believe that borrowers now want an MLO who is more of an advisor, providing information and giving expert opinions,” Michelle says. “Don’t be afraid to take on that role and offer advice to your clients. Of course, always allow the borrower to make the ultimate decisions.”
Mortgage Prediction #3: Slow Job Market, Debt-to-Income, and Overall Credit Quality Matter More
Fortune’s 2026 job market outlook projects slow growth during the first part of the year, with the unemployment rate staying steady. Job growth is predicted to rebound during the second half of 2026 and unemployment to begin a descent. This is, in part, projected to be a result of tax cuts from the One Big Beautiful Bill Act, easing inflation, anticipated Federal Reserve interest rate cuts, and a steadier tariff policy.
Still, with a slow job market, borrowers on the cusp of qualifying mortgages may experience stricter lending conditions.
MLO Opportunity: Prepare Borrowers and Protect Loan Approvals
MLOs have an opportunity to help borrowers understand tighter lending restrictions and mortgage affordability factors. Set expectations early around documentation and income verification to help avoid surprises later in the process.
“One of the first places lenders may tighten is in debt-to-income (DTI) ratios,” Michelle explains. “The standard for housing and DTI are very flexible based on other compensating factors. But in a down or slow market, those ratios get tighter and there is less flexibility in going above the standard expected ratios.
“The borrowers who are harder to qualify are those who will have a more difficult time providing documentation,” Michelle says. “So, think about alternatives. What else can you get from a borrower to verify what their application says?"
She adds that MLOs should keep reassuring borrowers that they are working for them and with them during the qualification process. By helping borrowers prepare strong, well-documented files and acting as a guide through tighter lending conditions, MLOs can continue to support successful closings, even in a more cautious 2026 market.
How MLOs Should Prepare Their Businesses for 2026
While no one has a crystal ball, we do know change is on the horizon. But even in an evolving landscape, you can set yourself up for a successful year using evergreen strategies.
Stay Informed on Market Conditions
“I think we have some big changes coming in the first half of the year that will slow down homebuying, but I do see an increase later in the year once the industry has gotten through the growing pains of the pending changes,” Michelle notes. “These shifts may include a change in credit scoring models, away from the traditional credit scoring methods we use now. There are also big changes coming for appraisers that may impact home values somewhat.”
There's also pending legislation to reduce or even eliminate property taxes in various states. This change could bring economic relief for homebuyers as easily as it could challenges. In Florida, for example, home prices could increase as a result.
Plus, rumors of a housing market reset are making waves.
Set Goals and Commit to Success
Michelle’s advice for MLOs is straightforward:
"Remain flexible and committed to your success," she says. “And don’t get discouraged. Not all deals are going to come to fruition this year, and that's okay. Set goals, make plans, and execute them. Stay informed about national and local market conditions, and use your downtime to learn and level up with professional development.”
Dive Deeper: Watch Our 2026 Mortgage Predictions Webinar
Get more market intelligence by watching Michelle’s recent webinar presented by The CE Shop and the National Association of Mortgage Brokers (NAMB).
Stay Ahead of What’s Next in Mortgage
The mortgage market doesn’t stand still. That's why we go beyond providing you with your required MLO Continuing Education. We also help you stay informed with expert-led insights on what’s happening now in mortgage and what’s coming next. Bookmark our Mortgage Essentials blog for valuable monthly intel that keeps you competitive.
