Will Mortgage Rates Go Down in December 2026? What the Fed Meeting Means
A big December drop looks unlikely with the Fed leaning toward a hike. Here are the four dates that will decide rates, and what to do now.
- Short answer: a big drop in December 2026 is unlikely. The Fed is leaning toward a hike at its December 8–9 meeting, not a cut.
- Where rates are now: Freddie Mac’s 30-year average was 7.24% for the week of October 29, 2026, the lowest reading of October but still about a point higher than a year ago.
- What forecasters expect: Fannie Mae sees 7.4% for late 2026 and the MBA about 7.3%.
- The dates that decide it: jobs report Nov 6, inflation report Nov 10, jobs again Dec 4, and the Fed on Dec 9.
December is when a lot of people hope for a holiday gift from the mortgage market. This year, the gift is more likely to be “rates hold roughly steady” than “rates fall off a cliff.” Here’s why, what could surprise us, and how to plan either way.
What the Fed is likely to do in December
The Federal Reserve raised its key rate by a quarter point in September 2026, to a range of 3.75%–4.00%. On October 28 it held that range, but two officials voted for another hike. The Fed’s statement said inflation “remains elevated,” and the Fed’s own September projections pointed to one more increase before the end of 2026.
Markets agree. After the October meeting, futures traders put the odds of a December hike above 80%, according to CME FedWatch. The Fed’s next decision comes on Wednesday, December 9, 2026, along with a fresh set of projections (the “dot plot”).
Why mortgage rates don’t simply follow the Fed
A 30-year fixed mortgage is a long loan, so lenders price it off long-term bond yields, mainly the 10-year Treasury. Those yields react to inflation, economic growth, government borrowing and global markets. The Fed’s short-term rate is one ingredient, not the whole recipe.
That’s why rates hit 7.40% in mid-October right after a hot September inflation report, and then eased to 7.24% by the end of the month even though the Fed didn’t cut anything. Want the full story? Read how mortgage rates actually work.
The four dates that will decide December’s rates
| Date | Release | If it comes in hot | If it comes in cool |
|---|---|---|---|
| Fri, Nov 6 | October jobs report | Rates likely rise | Rates could ease |
| Tue, Nov 10 | October inflation (CPI) | Rates likely rise, hike odds grow | Biggest chance of a real dip |
| Fri, Dec 4 | November jobs report | Rates likely rise | Rates could ease |
| Wed, Dec 9 | Fed decision + dot plot | More hikes signaled for 2027 | A calmer outlook could pull rates down |
One more December release, November’s inflation report on Thursday, December 10, lands the day after the Fed meets, so it will shape January more than December.
What a small move would mean for your payment
Here’s monthly principal and interest on a $350,000, 30-year fixed loan:
| Scenario | Rate | Monthly payment | vs. today |
|---|---|---|---|
| Nice surprise | 7.00% | $2,329 | −$57 |
| Today (Freddie Mac) | 7.24% | $2,385 | — |
| Forecast-ish | 7.30% | $2,400 | +$14 |
| Rough month | 7.50% | $2,447 | +$62 |
Should you lock now or wait until after the Fed?
- Lock if: you’re under contract and closing in the next 30–60 days. A rate lock protects you if the jobs or inflation reports go the wrong way.
- Consider floating if: your closing date is far off, you can afford a higher payment, and your lender offers a “float-down” option if rates fall.
- Still shopping for a home? Get pre-approved with a budget that works at 7.5%, not 6.5%. Our home affordability calculator makes that easy.
What to watch next
We track every one of these releases on our mortgage rate forecast page, updated every week. For the longer view, read will mortgage rates go down in 2027? and our recap of the Fed’s October decision.
FAQ
Will the Fed cut rates in December 2026?
A cut looks very unlikely. The Fed raised rates in September, held in October with two officials voting to hike again, and markets see a high chance of a hike on December 9.
Will mortgage rates be lower by Christmas?
They could dip a little if the November 6 jobs report and the November 10 inflation report come in cooler than expected. Most forecasts point to rates staying around 7.3%–7.4% through the end of the year.
Is December a good time to buy a house?
December often has fewer buyers, which can mean more room to negotiate on price. That can matter more than a small rate move. Just make sure the payment works at today’s rate.
When does the Fed announce its December decision?
Wednesday, December 9, 2026, at 2:00 p.m. Eastern, followed by a press conference and new economic projections.
Sources: Federal Reserve FOMC statement (Oct 28, 2026) and Summary of Economic Projections (Sept 16, 2026); Freddie Mac Primary Mortgage Market Survey (Oct 29, 2026); Fannie Mae ESR Housing Forecast (Oct 2026); Mortgage Bankers Association forecast (Oct 11, 2026); CME FedWatch as reported Oct 28, 2026; U.S. Bureau of Labor Statistics release calendar. Payment examples computed by Keys & Coffee. This article is general education, not financial advice. Keys & Coffee is not a lender.
Written by
Shivam Kaushik· IMSHIVA
Founder & Director, QuibbleTech Solutions Pvt Ltd · Editor, Keys & Coffee
Shivam Kaushik is the founder of QuibbleTech Solutions Pvt Ltd and the editor of Keys & Coffee. He is not a licensed loan officer or financial adviser. Every guide here is written in plain English and checked against official sources such as the CFPB, HUD, Fannie Mae, Freddie Mac and the Federal Reserve. For advice on your own loan, talk to a licensed lender.
Keys & Coffee is an independent education site. We are not a lender or mortgage broker, we do not take loan applications or payments, and nothing here is financial advice. This site is not affiliated with Axia Home Loans, Axia Financial, LLC, or Planet Home Lending. Rates and rules change often — always confirm details with a licensed loan officer and check any lender on the NMLS Consumer Access site.
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