Why Mortgage Rates May Keep Climbing in 2026

It's not just Fed policy driving mortgage rates higher — oil prices are playing a bigger role than most buyers realize. Here's what California homebuyers and investors should expect.

There's a lot of noise right now about where mortgage rates are headed, and I want to cut through it with a clear take: the bigger driver of rate movement in 2026 isn't the Fed's tone — it's oil prices.

When oil prices rise, inflation tends to follow. And when inflation runs hot, mortgage rates climb with it. Veteran market watchers are pointing to this dynamic as the real force pushing borrowing costs higher right now, regardless of what the Federal Reserve signals in its communications.

For California buyers and real estate investors, this matters. Waiting for rates to drop significantly before making a move could mean waiting longer than expected — and potentially paying more for a property as prices in many California markets remain competitive.

My practical advice: don't try to time the market perfectly. Instead, focus on what you can control — your credit profile, your down payment strategy, and locking in the best rate available to you today. If rates do drop later, refinancing is always an option.

Want to know what rates you qualify for right now? Contact our team for a no-obligation rate review — we'll help you make a smart move no matter where the market is headed.