Mortgage rates to stay above 6% through 2025, Fannie Mae says
Hennion & Walsh Asset Management President and CIO Kevin Mahn reacts to a Zillow economist warning a 7% mortgage rate could be the new normal on ‘The Big Money Show.’
Fannie Mae has lifted its forecast for mortgage rates from just a month ago, saying rates will stay higher for longer than they previously thought — and fewer homes will be sold than they expected in 2024.
The government-backed organization said in its February forecast that it expects the average rate for a 30-year fixed mortgage to drop below 6% by the end of the year to 5.9% in the fourth quarter.
Now, Fannie Mae expects rates to be a half-percent higher (6.4%) by the end of this year, and remain above 6% for another two years, gradually declining to a flat 6% by fourth-quarter 2025.
A «For Sale» outside a house in Hercules, California, on May 31, 2022. (David Paul Morris/Bloomberg via / Getty Images)
Freddie Mac's latest data shows the average rate for a 30-year fixed mortgage is currently around 6.74%. After peaking at 7.79% in late October, rates steadily declined until mid-January when they reversed course and began marching back up.
FED LEAVES RATES UNCHANGED, SAYS THREE CUTS STILL PLANNED
Rates have fallen slightly for the past few weeks, but economists do not expect them to drop significantly any time soon. Sam Khater, Freddie Mac’s chief economist, said last week, «In this environment, there is a good possibility that rates will stay higher for a longer period of time.»
Mahoney Asset Management CEO Ken Mahoney weighs in on the upcoming housing data release, artificial intelligence stocks and his economic outlook.
«The housing market is likely to continue to face the dual affordability constraints of high home prices and elevated interest rates
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