Fannie Mae raises 2027 mortgage rate forecast to 7.5%, up from 6.7%

Fannie Mae economists now expect the average 30-year fixed mortgage rate to hit 7.4% in the fourth quarter of this year and average 7.5% through all of 2027, up sharply from their previous forecast of 6.8% and 6.7%, according to CNBC.

The 30-year fixed stood at 7.46% on Tuesday, according to Mortgage News Daily, and was expected to move higher as bond yields rose following a hotter-than-expected inflation report.

Rates have climbed sharply since the start of September as the Federal Reserve raised its benchmark rate for the first time in more than three years and the 10-year Treasury yield rose on higher oil prices and broader economic concerns.

Pending home sales were down 8.5% year-over-year in September, according to Zillow, as fewer buyers can afford a home or qualify for a mortgage at the higher rates.