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Fannie Mae sharply raises mortgage rate forecast for 2027
CNBC • • business
Key Points:
- Fannie Mae economists have revised their mortgage rate forecasts upward, predicting the average 30-year fixed rate will reach 7.4% by the end of 2023 and 7.5% throughout 2024, higher than previous estimates of around 6.7-6.8%.
- Mortgage rates have been rising sharply since September, driven by persistent inflation, rising bond yields, higher oil prices, and the Federal Reserve's recent interest rate hike.
- The 30-year fixed mortgage rate closely follows the 10-year Treasury yield, which has increased due to global economic concerns and inflationary pressures.
- Higher mortgage rates are significantly impacting the housing market, with pending home sales down 8.5% year-over-year in September and a sharp decline in mortgage demand as affordability and qualification criteria tighten.
- Fannie Mae has not provided additional comments regarding the updated mortgage rate forecast.
