Mortgage rates expected to fall below 6% this year, Fannie Mae analysts say
After reaching a post-pandemic high of 7.8% last fall, the average 30-year mortgage rate is now expected to end the year below 6%, according to analysts at Fannie Mae.
After reaching a post-pandemic high of 7.8% last fall, the average 30-year mortgage rate is now expected to end the year below 6%, according to analysts at Fannie Mae.
Yet even as the housing market rebalances, home sales rates are expected to remain below their long-term trajectory.
The 30-year mortgage rate is currently at about 6.6%. Mortgage rates tend to run counter to demand for U.S. government bonds. That means when demand for bonds is up, mortgage rates fall.
And thanks to a slowing economy, demand for bonds has been increasing. Specifically, the 10-year Treasury yield has fallen nearly 1% from its peak in October.
"The outlook for both short-term (bond) rates and mortgage rates is now decidedly lower than what we had previously forecast," the Fannie Mae analysts said.
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