Fannie Mae sharply raises mortgage rate forecast for 2027

Economists at Fannie Mae are now predicting much higher mortgage rates through the end of 2026 and into 2027. It now puts the average rate on the 30-year fixed at 7.4% for the fourth quarter of this year and 7.5% through all of next year. It previously forecast 6.8% for the fourth quarter and 6.7% for all of next year. The average rate on the 30-year fixed stood at 7.46% Tuesday, according to Mortgage News Daily, but will likely move higher today. Bond yields are rising after a hotter-than-expected inflation report. Mortgage rates have been rising sharply since the start of September, as inflation remains stubbornly high and bond markets sell off due to several factors.