# Freddie Mac 30Y fixed-rate mortgage average below 5.75% in 2026? 2026 Updated: April 28, 2026 Category: Economics Tags: Housing HTML: /markets/economics/housing/freddie-mac-30y-fixed-rate-mortgage-average-below-5-75-in-2026/ ## Short Answer **Key takeaway.** The **model** assigns meaningfully higher odds than the **market** for the 'Yes' outcome, estimating the **probability** at **38.9%** compared to the **market**'s **24.0%**. ## Key Claims (January 2026) **- - Fed projects 2.5% long-run Federal Funds Rate.** - MBA forecasts stable **2.1%** mortgage-Treasury spread for H2 2025. - FOMC showed intent to alter balance sheet runoff during 2025. - Major banks forecast varying U.S. recession probabilities for late 2025. ### Why This Matters (GEO) - AI agents extract claims, not arguments. - Improves citation probability in summaries and answer cards. - Enables fact stitching across multiple sources. ## Executive Verdict **Key takeaway.** **Model**'s **39%** **probability** implies 4.2x payout at 24c, with Fed targeting **2.5%** long-run FFR. ### Who Wins and Why | Outcome | Market | Model | Why | | --- | --- | --- | --- | | Yes | 24.0% | 38.9% | The Federal Reserve is anticipated to cut rates by 2026 as inflation moderates. | ## Model vs Market - Model Probability: 38.9% (Yes) - Market Probability: 24.0% (Yes) - Yes refers to: Yes - Edge: +14.9pp - Expected Return: +62.0% - R-Score: 1.49 - Total Volume: $13,456.03 - 24h Volume: $3,604.98 - Open Interest: $1,976.56 - Expiration: December 31, 2026 ## Market Behavior & Price Dynamics This market has experienced a distinct and rapid upward trend since its inception. The perceived probability of the Freddie Mac 30-year fixed-rate mortgage average being below 5.75% in 2026 has nearly doubled, climbing from a low of 13.0% to its current price of 24.0%. The entire price action has been contained within a 14-point range between 13.0% and a peak of 27.0%. The most significant movement occurred in the market's initial days, with a sharp increase from 13.0% to 24.0% in the span of one week. As there is no specific external context or news provided, this price movement reflects a rapid shift in trader sentiment and initial positioning rather than a reaction to a specific economic event. The volume pattern strongly supports the upward price movement, indicating growing conviction among participants. Trading began with minimal volume but increased significantly as the price rose, with a notable surge accompanying the move to the 24.0% level. This suggests that the price increase was driven by active and committed buying. The market's all-time high of 27.0% currently serves as a near-term resistance level, while the opening price of 13.0% establishes a historical support floor. Overall, the chart indicates that market sentiment has quickly and decisively shifted from highly skeptical to moderately optimistic about the prospect of mortgage rates falling below the 5.75% threshold by the resolution date. ## Contract Snapshot This market resolves to YES if any Freddie Mac Primary Mortgage Market Survey (PMMS) release, between its issuance and December 31, 2026, reports the 30-year fixed-rate mortgage average below 5.75%, verified by Freddie Mac. Otherwise, the market resolves to NO. The market closes early if the YES condition is met, or by December 31, 2026, 11:55 am EST if the condition is not met. ## Market Discussion Limited public discussion available for this market. ## Market Data | Contract | Yes Bid | Yes Ask | Last Price | Volume | Open Interest | | --- | --- | --- | --- | --- | --- | | Yes | 23% | 24% | 24% | $13,456.03 | $1,976.56 | ## What is the Federal Reserve's long-run interest rate projection? Median Long-Run Federal Funds Rate | 2.5 percent [[^]](https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20251210.htm) | Projection Source | December 2025 Summary of Economic Projections (SEP) [[^]](https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20251210.htm) | Projection Reflection | Neutral nominal federal funds rate [[^]](https://fredblog.stlouisfed.org/2025/12/fomc-summary-of-economic-projections-december-2025/) | **The Fed projects a 2.5 percent long-run Federal Funds Rate** The Fed projects a 2.5 percent long-run Federal Funds Rate. The Federal Reserve's December 2025 Summary of Economic Projections (SEP) indicates that the median long-run projection for the Federal Funds Rate is 2.5 percent. This figure, derived from the Federal Reserve's December 10, 2025, FOMC Projections materials, represents the "longer run" outlook for the key interest rate [[^]](https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20251210.htm). This projection reflects FOMC participants' monetary policy assessments. This long-term projection is a reflection of the individual assessments made by Federal Open **Market** Committee (FOMC) participants regarding the appropriate monetary policy stance over an extended period. It is frequently referred to as the neutral nominal federal funds rate [[^]](https://fredblog.stlouisfed.org/2025/12/fomc-summary-of-economic-projections-december-2025/). Fundamentally, this estimated rate aims to be consistent over time with both maximum sustainable employment and price stability within the economy [[^]](https://www.federalreserve.gov/monetarypolicy/fomcminutes20251210.htm). Financial institutions closely monitor Federal Reserve's economic projections. Data included in the Summary of Economic Projections, such as the 'dot plot' and the aggregated median, are regularly published by the Federal Reserve. These projections are closely monitored and tracked by various financial institutions and research organizations for their insights into future monetary policy [[^]](https://www.yardeni.com/tools/fomc-sep). ## What is the Forecasted Mortgage-Treasury Yield Spread for H2 2025? MBA Q3 2025 Mortgage-Treasury Spread | 2.1% [[^]](https://www.mba.org/docs/default-source/research-and-forecasts/forecasts/2025/forecast-commentary-sep25-final.pdf?sfvrsn=e9624e88_2) | MBA Q4 2025 Mortgage-Treasury Spread | 2.1% [[^]](https://www.mba.org/docs/default-source/research-and-forecasts/forecasts/2025/forecast-commentary-sep25-final.pdf?sfvrsn=e9624e88_2) | Fannie Mae H2 2025 Mortgage-Treasury Spread | 2.1% [[^]](https://www.fanniemae.com/media/document/pdf/economic-forecast-102025) | **The Mortgage Bankers Association (MBA) forecasts a stable 2.1% mortgage-Treasury spread for H2 2025** The Mortgage Bankers Association (MBA) forecasts a stable **2.1%** mortgage-Treasury spread for H2 2025. In its September 2025 forecast commentary, the MBA projects a consistent spread between the 30-year fixed mortgage rate and the 10-year Treasury yield for the second half of 2025. For the third quarter of 2025, the MBA anticipates the 30-year fixed mortgage rate at **6.2%** and the 10-year Treasury yield at **4.1%**, resulting in a spread of **2.1%**. For the fourth quarter of 2025, the MBA projects the 30-year fixed mortgage rate to be **6.1%** and the 10-year Treasury yield at **4.0%**, maintaining the spread at **2.1%** [[^]](https://www.mba.org/docs/default-source/research-and-forecasts/forecasts/2025/forecast-commentary-sep25-final.pdf?sfvrsn=e9624e88_2). Fannie Mae also projects a consistent **2.1%** spread for the latter half of 2025. Its October 2025 economic forecast provides identical spread projections for the second half of 2025. Fannie Mae expects the 30-year fixed mortgage rate to average **6.0%** and the 10-year Treasury yield to average **3.9%** in the third quarter of 2025, yielding a spread of **2.1%**. For the fourth quarter of 2025, their forecast includes a 30-year fixed mortgage rate of **5.9%** and a 10-year Treasury yield of **3.8%**, also resulting in a spread of **2.1%** [[^]](https://www.fanniemae.com/media/document/pdf/economic-forecast-102025). Both organizations align on a consistent **2.1%** spread for H2 2025. Based on their respective H2 2025 forecasts, both the MBA and Fannie Mae project that the spread between the 30-year fixed mortgage rate and the 10-year Treasury yield will stabilize at **2.1%** through the second half of 2025 [[^]](https://www.mba.org/docs/default-source/research-and-forecasts/forecasts/2025/forecast-commentary-sep25-final.pdf?sfvrsn=e9624e88_2). ## What is the 5-Year, 5-Year Forward Inflation Expectation for Q1 2026? Q1 2026 5Y5Y Forward Inflation Expectation | Not available in provided research [[^]](https://alfred.stlouisfed.org/series?seid=T5YIFRM) | Federal Reserve Long-Run Inflation Target | 2% [[^]](https://alfred.stlouisfed.org/series?seid=T5YIFRM) | Recent 5Y5Y Forward Inflation Expectation | Around 2.2% to 2.4% [[^]](https://fred.stlouisfed.org/series/T5YIFR), [[^]](https://fred.stlouisfed.org/series/T5YIFRM) | **The 5-Year, 5-Year Forward Inflation Expectation Rate lacks Q1 2026 data** The 5-Year, 5-Year Forward Inflation Expectation Rate lacks Q1 2026 data. The 5-Year, 5-Year Forward Inflation Expectation Rate (T5YIFR or T5YIFRM) is a key metric derived from Treasury Inflation-Protected Securities (TIPS) that indicates what **market** participants expect inflation to be, on average, over the five-year period starting five years from now [[^]](https://alfred.stlouisfed.org/series?seid=T5YIFRM), [[^]](https://fred.stlouisfed.org/series/T5YIFR), [[^]](https://fred.stlouisfed.org/series/T5YIFRM). While various sources offer detailed historical series for this rate [[^]](https://alfred.stlouisfed.org/series?seid=T5YIFRM), [[^]](https://fred.stlouisfed.org/series/T5YIFR), [[^]](https://fred.stlouisfed.org/series/T5YIFRM), [[^]](https://ycharts.com/indicators/5year_5year_forward_inflation_expectation_rate), [[^]](https://research.stlouisfed.org/fred2/series/T5YIFR), they do not contain specific prevailing data or forecasts for Q1 2026. Therefore, a definitive statement about its exact level during that future quarter cannot be made based on the available information. The Federal Reserve targets **2%** inflation, which this rate typically aligns with. The Federal Reserve's explicit long-run target for inflation, as measured by the personal consumption expenditures (PCE) price index, is **2%**. The 5-Year, 5-Year Forward Inflation Expectation Rate serves as an indicator of whether **market** participants believe inflation will trend above or below this target over the longer term. Historically, this rate has often moved in a range generally centered around or slightly above the Federal Reserve's **2%** target, indicating that **market** expectations typically align with the Fed's ability to achieve its inflation goal in the long run. For example, recent observations of the 5-Year, 5-Year Forward Inflation Expectation Rate have shown it generally hovering around **2.2%** to **2.4%** [[^]](https://fred.stlouisfed.org/series/T5YIFR), [[^]](https://fred.stlouisfed.org/series/T5YIFRM), suggesting expectations are broadly consistent with or slightly above the target. Without specific data or explicit forecasts for Q1 2026, it is not possible to state definitively whether the rate will be trending above or below the Federal Reserve's **2%** target during that period, as the actual level will depend on economic conditions, monetary policy decisions, and **market** sentiment prevailing at that time. ## What Was the Federal Reserve's 2025 MBS Runoff Plan? Initial Balance Sheet Runoff Slowdown Indication | March 2025 [[^]](https://www.reuters.com/markets/us/feds-says-will-slow-balance-sheet-runoff-process-2025-03-19/) | Overall Balance Sheet Reduction Conclusion | Effective December 1, 2025 (announced October 29, 2025) [[^]](https://www.reuters.com/business/finance/fed-end-balance-sheet-reduction-december-1-2025-10-29/) | MBS Policy Shift Announcement | October 29, 2025 [[^]](https://www.newyorkfed.org/markets/opolicy/operating_policy_251029) | **Throughout 2025, the FOMC demonstrated a clear intent to alter balance sheet runoff** Throughout 2025, the FOMC demonstrated a clear intent to alter balance sheet runoff. The Federal Open **Market** Committee indicated a progression toward changing the pace of the balance sheet runoff throughout the year. By March 19, 2025, the Federal Reserve had signaled its intention to slow the overall balance sheet runoff process [[^]](https://www.reuters.com/markets/us/feds-says-will-slow-balance-sheet-runoff-process-2025-03-19/). Internal discussions among FOMC members regarding the precise timing and details of such a slowdown were noted in April [[^]](https://www.cnbc.com/2025/04/09/fed-minutes-show-some-debate-over-balance-sheet-runoff-slowdown.html). This intention culminated in a definitive plan to conclude the contraction phase entirely, with the Federal Reserve announcing on October 29, 2025, that it would wind down its balance sheet reduction efforts, effective December 1, 2025 [[^]](https://www.reuters.com/business/finance/fed-end-balance-sheet-reduction-december-1-2025-10-29/). This decision was communicated through various channels, including FOMC minutes [[^]](https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20251029.pdf) and a press conference [[^]](https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20251029.pdf), influenced by considerations like tightening money markets [[^]](https://www.reuters.com/business/finance/fed-end-balance-sheet-reduction-december-1-2025-10-29/). A significant policy shift for Mortgage-Backed Securities (MBS) was announced. The comprehensive plan, communicated on October 29, 2025, outlined a notable change specifically impacting MBS. A statement from the Federal Reserve Bank of New York on that date, titled 'Statement Regarding Reinvestment of Principal Payments from Treasury Securities and Agency Securities,' detailed an updated policy directly applicable to MBS, which are categorized as Agency Securities [[^]](https://www.newyorkfed.org/markets/opolicy/operating_policy_251029). This announcement indicated a departure from the passive runoff approach for MBS, signaling an intention to either fully or partially reinvest these principal payments. Such reinvestment would effectively slow or halt the reduction of the Fed's MBS holdings [[^]](https://www.newyorkfed.org/markets/opolicy/operating_policy_251029). This policy change aligns with the broader decision to end the overall balance sheet reduction by December 1, 2025 [[^]](https://www.reuters.com/business/finance/fed-end-balance-sheet-reduction-december-1-2025-10-29/), thereby stopping the active runoff of MBS from that date forward. ## What Are the Latest U.S. Recession Probabilities for Late 2025? Goldman Sachs U.S. Recession Odds (March 2026) | 25% [[^]](https://fortune.com/2026/03/12/will-economy-enter-recession-goldman-jobs-war-economy/) | Goldman Sachs U.S. Recession Odds (January 2026) | 20% [[^]](http://www.businessinsider.com/goldman-sachs-stock-market-recession-economic-outlook-david-solomon-2026-1) | Treasury Yield Curve | Key recession indicator [[^]](https://alfred.stlouisfed.org/series?seid=T10Y3M) | **Major bank forecasts show varying U.S** Major bank forecasts show varying U.S. recession probabilities for late 2025/H1 2026. Goldman Sachs increased its U.S. recession odds to **25%** for March 2026 [[^]](https://fortune.com/2026/03/12/will-economy-enter-recession-goldman-jobs-war-economy/), up from a **20%** projection in January 2026 [[^]](http://www.businessinsider.com/goldman-sachs-stock-**market**-recession-economic-outlook-david-solomon-2026-1). Despite these adjustments, Goldman Sachs CEO David Solomon stated in April 2026 that there is a "low US recession risk for 2026," citing the economy's resilience [[^]](https://www.roic.ai/news/goldman-sachs-ceo-sees-low-us-recession-risk-for-2026-emphasizing-economic-resilience-04-21-2026). Other forecasts lack specific probabilities; the yield curve is a general indicator. While J.P. Morgan published a "2026 **Market** Outlook" [[^]](https://www.jpmorgan.com/insights/global-research/outlook/**market**-outlook), the research did not detail specific recession **probability** figures from them for the late 2025 or H1 2026 timeframe. The Treasury yield curve, particularly the 10-Year minus 3-Month (10Y-3M) spread, serves as a recognized indicator for future economic downturns [[^]](https://alfred.stlouisfed.org/series?seid=T10Y3M). Historically, an inversion of this spread has often preceded U.S. recessions, and models such as the NY Fed Recession **Probability** **Model** utilize it for forecasting [[^]](https://recessionpulse.com/indicators/ny-fed-recession-prob). However, the provided research does not offer a direct, specific **probability** assignment from the yield curve for a recession beginning in late 2025 or H1 2026. ## What Could Change the Odds **Key takeaway.** Catalyst analysis unavailable. ## Key Dates & Catalysts - **Expiration:** January 07, 2027 - **Closes:** December 31, 2026 ## Decision-Flipping Events - Catalyst analysis unavailable. ## Related Research Reports - [China overtakes USA’s economy by 2030?](/markets/economics/growth/china-overtakes-usa-s-economy-by-2030/) - [Costco raises hot dog combo price?](/markets/economics/inflation/costco-raises-hot-dog-combo-price/) - [Next Fed rate hike?](/markets/economics/fed/next-fed-rate-hike/) - [US gas prices on Apr 29, 2026](/markets/economics/oil-and-energy/us-gas-prices-on-apr-29-2026/) ## Historical Resolutions No historical resolution data available for this series. ## Disclaimer This content is for informational and educational purposes only and does not constitute financial, investment, legal, or trading advice. Prediction markets involve risk of loss. Past performance does not guarantee future results. We are not affiliated with Kalshi or any prediction market platform. Market data may be delayed or incomplete. ### Data Sources & Model Transparency **Data Sources:** Octagon Deep Research aggregates information from multiple sources including news, filings, and market data. **Freshness:** Analysis is generated periodically and may not reflect the latest developments. Verify critical information from primary sources.