Fannie Mae Raises Mortgage Rate Forecast Through 2027
Economists at Fannie Mae have revised their mortgage rate forecasts upward, predicting a 30-year fixed-rate average of 7.4% for the fourth quarter of 2026 and maintaining that level through all of 2027. This marks an increase from previous estimates of 6.8% in Q4 2026 and 6.7% for 2027. The upward revision reflects ongoing inflationary pressures, rising bond yields, and a recent Federal Reserve rate hike after more than three years without one. Mortgage rates have been climbing sharply since early September as investors react to higher oil prices and global economic concerns. This has led to a slowdown in the housing market, with pending home sales down 8.5% year-over-year in September according to Zillow. Buyers are facing tighter affordability conditions due to rising costs and stricter mortgage qualification standards. The updated forecast signals continued financial stress for potential homeowners and may further dampen real estate activity as higher rates persist into the next year.
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Topics: economic forecast housing market inflation mortgage rates