Mortgage rates have hovered in the 6.3% to 6.5% range through mid-May 2026 after averaging 6.18% in the first two months of the year, driven primarily by persistent inflation readings above 3% and elevated 10-year Treasury yields amid geopolitical tensions in the Middle East. The Federal Reserve’s cautious stance on policy easing, combined with stronger-than-expected labor market data, has kept longer-term borrowing costs anchored higher than many analysts projected at the start of 2026. Consensus forecasts from Fannie Mae and the Mortgage Bankers Association point to a full-year average near 6.2%, with potential dips toward 5.7% if core CPI moderates and the central bank signals additional rate cuts at upcoming FOMC meetings. Key upcoming catalysts include the next CPI release and June policy decision, which could shift trader expectations for whether rates test lower thresholds before year-end.