The Future of Interest Rates

Owners and investors still talk about interest rates as if 2020 and 2021 were normal. They were not. They were an unusually cheap-money period that distorted expectations for buyers, sellers, and rental investors alike.

As of late November 2025, the average 30-year fixed mortgage rate in the United States was running near 6.23 percent. That feels expensive if your mental baseline is the low-rate pandemic market. It looks much less extreme when you compare it with longer rate history.

A quick look back at rate history

• After the 2008 financial crisis, rates gradually drifted downward because of slow inflation, a cautious Federal Reserve, and global economic conditions.
• During the pandemic, rates hit historic lows. By early 2021, the 30 year fixed rate dropped to about 2.65 percent.
• In 2022, inflation surged and the Federal Reserve began raising its benchmark rate to cool the economy. Mortgage rates climbed quickly as a result.
• From 2023 through 2025, most 30 year mortgages stayed above 6 percent as the economy adjusted and inflation expectations shifted.

What influences interest rates

Mortgage rates are connected to several factors. The Federal Reserve sets short term interest rates, which influence borrowing costs across the economy.

Long term mortgage rates, however, tend to follow the yield on long term Treasury bonds. This means that inflation expectations, economic growth forecasts, federal debt levels, and global investing patterns all play a role in the rate a borrower sees when they apply for a mortgage.

What may happen next

Many analysts expect rates to stay elevated for a while. The Mortgage Bankers Association has projected that 30-year mortgage rates will likely remain at or above 6 percent through 2026.

That does not rule out movement downward. It does suggest owners and investors should stop building plans around a quick return to the 3 percent mortgage world. A modest easing is one thing. A full reset to those earlier conditions is another.

What this means for buyers and sellers

Rates above 6 percent reduce buying power. That changes how owners underwrite acquisitions, how quickly buyers move, and how much patience sellers need. It can also keep more households in the rental pool longer, which matters for investors watching occupancy and renewal behavior.

For sellers, higher rates usually mean a more selective buyer pool. For buyers, they mean harder monthly payment math. For rental owners, they often mean a market that rewards operational discipline because households think longer before leaving a stable lease.

If rates begin to settle or drift lower, buyers sitting on the sidelines may return to the market. Sellers may need to adjust pricing expectations and stay flexible. For guidance on positioning a property in the Dallas Fort Worth market, explore our Dallas property management overview and investor support page.

Why rates may stay higher than what we saw in 2020 and 2021

• Ongoing inflation pressure may keep long term yields higher.
• Larger government deficits may push Treasury yields up, which influences mortgage rates.
• A cautious Federal Reserve may wait longer to cut rates, which can hold borrowing costs up across the economy.

Final thoughts

Current rates may feel unfriendly compared with the cheapest money of the early 2020s, but they are not historically bizarre. The better working assumption is that owners, buyers, and investors need to plan around a market where financing costs stay meaningful for a while.

That makes execution more important. When financing is no longer doing the heavy lifting, pricing discipline, property condition, lease quality, and tenant retention start carrying more of the return. If you want to talk through what that means for a Dallas-Fort Worth rental, contact our team.