Aug 31, 2026 · 19 min
Mortgage rates face a higher-for-longer test in 2026
The mortgage rate outlook for the rest of 2026
The outlook hinges on whether labor-market weakness can offset inflation, geopolitical, and Federal Reserve risks before rates move materially lower.
- 1Logan Mohtashami expects mortgage rates to remain near 6.50% to 6.75% through the rest of 2026.
- 2Rates approaching 6% would likely require a substantially weaker labor market, rising unemployment, or increasing jobless claims.
- 3A hawkish Fed or major credit event could push rates higher, while September employment data may shape hike expectations.
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Logan Mohtashami rejects the idea that mortgage rates will simply fall toward 6%, arguing that a much weaker labor market would be required.
The brief
Logan Mohtashami frames the rest of 2026 as a contest between persistent inflation risks and the labor-market weakness needed to bring mortgage rates down.
Oil prices, tariffs, and geopolitical conflict could keep inflation elevated, while employment data remains central to the Federal Reserve’s next policy decision.
Improved mortgage spreads have lowered rates substantially, but an aggressively hawkish Fed or major credit event could erase that protection and push rates higher.
Mohtashami’s base case keeps mortgage rates around 6.50% to 6.75%; reaching 6% would require noticeably weaker employment conditions.
The September jobs report could determine whether a Fed hike gains traction, especially if labor data stays firm and inflation risks persist.