{"id":319908,"date":"2025-10-21T01:01:13","date_gmt":"2025-10-21T01:01:13","guid":{"rendered":"https:\/\/www.europesays.com\/us\/319908\/"},"modified":"2025-10-21T01:01:13","modified_gmt":"2025-10-21T01:01:13","slug":"mortgage-rates-arent-expected-to-fall-below-6-economist-claims","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/319908\/","title":{"rendered":"Mortgage rates aren’t expected to fall below 6%, economist claims"},"content":{"rendered":"

Mortgage rates<\/a>\u00a0could remain stuck above 6%<\/a> for the next several years, according to newly released projections from the economists at the\u00a0Mortgage Bankers Association<\/a>.<\/p>\n

MBA Chief Economist\u00a0Mike Fratantoni\u00a0presented the forecast at the group\u2019s annual conference in Las Vegas on Sunday, projecting that 30-year fixed mortgage rates will remain roughly in the range of 6% to 6.5% through the end of 2028.<\/p>\n

\u201cAs we move over the next couple of years, we think it\u2019s more likely that long [term] rates are going to go up rather than down, given the fiscal pressures on the economy,\u201d Fratantoni told the conference, referring to the impact of rising federal deficits on bond markets.<\/p>\n

That\u2019s a grim forecast for prospective homebuyers<\/a>, who have already suffered through three straight years of mortgage rates hovering above 6%, with rates averaging 6.27% as of last week, according to\u00a0Freddie Mac<\/a>.<\/p>\n<\/p>\n

MBA Chief Economist\u00a0Mike Fratantoni\u00a0presented the forecast at the group\u2019s annual conference in Las Vegas on Sunday. YouTube\/NFM TV<\/p>\n

It\u2019s also among the bleaker predictions issued by top economists in the housing industry, with\u00a0Fannie Mae\u2019s forecast<\/a>\u00a0more optimistic that mortgage rates will dip below 6% in late 2026.<\/p>\n

Frantantoni predicts that the\u00a0Federal Reserve<\/a>\u00a0will cut its short-term policy rate twice more in 2025, but only once next year, as concerns about inflation force the central bank to halt its cuts.<\/p>\n

Frantantoni predicts that the\u00a0Federal Reserve\u00a0will cut its short-term policy rate twice more in 2025. REUTERS<\/p>\n

The economist believes that growing government budget deficits<\/a> and elevated inflation expectations will keep longer term rates from falling further, even as the Fed cuts short-term rates this year and next.<\/p>\n

This will keep the key\u00a010-year Treasury yield<\/a>\u00a0above 4% and mortgage rates between 6% and 6.5%, he predicts. However, he expects there will be periods where rates ease, which will provide spurts of refinance activity, similar to what has occurred several times in 2025.<\/p>\n

Despite the bleak outlook on rates, Frantantoni expects that total home sales will increase next year to just above 5 million, up from the 4.8 million the MBA projects for 2025, including sales of both new and existing homes.<\/p>\n

\u201cWhile mortgage rates are not expected to decline further, housing supply has increased in recent months, which will ease home-price growth and provide more housing options for prospective buyers,\u201d he says. \u201cThe increase in inventories will put downward pressure on home prices across the country.\u201d<\/p>\n

Federal Reserve Chairman Jerome Powell speaks during a news conference following the Federal Open Market Committee meeting. AP<\/p>\n

The MBA economists predict that home prices will decline nationally<\/a> for several quarters over the next few years, before returning to modest annual growth in late 2027.<\/p>\n

Kan emphasized that housing market developments are location specific, as growing housing inventory in markets such as\u00a0Florida<\/a>,\u00a0Colorado<\/a>, and\u00a0Arizona<\/a>\u00a0have led to annual home-price declines, while tight inventory and challenges to homebuilding in the Northeastern and Midwestern states such as\u00a0New York<\/a>,\u00a0Connecticut<\/a>,\u00a0Illinois<\/a>, and\u00a0New Jersey<\/a>\u00a0drive price appreciation well above the national average.<\/p>\n

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MBA Deputy Chief Economist\u00a0Joel Kan\u00a0also spoke at the conference, where he noted that housing market developments are increasingly market-specific, with home prices now falling in much of the Sun Belt but continuing to grow in Northeast and Midwestern markets.<\/p>\n

Kan said that mortgage payment affordability had improved slightly, with the typical mortgage payment now at $2,067, down marginally from the peak<\/p>\n

The MBA economists predict that home prices will decline nationally for several quarters over the next few years. AP<\/p>\n

\u201cWhile median principal and interest payments are gradually declining, they are significantly higher than they were five years ago, given cumulative home-price appreciation and the current level of mortgage rates,\u201d says Kan.<\/p>\n

Kan says that borrowers have increasingly shifted to\u00a0adjustable-rate mortgages (ARM)<\/a>\u00a0and FHA loans to manage these affordability challenges.<\/p>\n

\u201cAdditionally, the cost burdens from increasing taxes and homeowners\u2019 insurance continue to pose challenges to both prospective homebuyers and existing homeowners,\u201d says Kan.<\/p>\n","protected":false},"excerpt":{"rendered":"Mortgage rates\u00a0could remain stuck above 6% for the next several years, according to newly released projections from the…\n","protected":false},"author":3,"featured_media":319909,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,79,7550,11194,160403,4329,10204,67,132,68],"class_list":{"0":"post-319908","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-finances","11":"tag-homeowners","12":"tag-mortgage-meltdown","13":"tag-real-estate","14":"tag-residential-real-estate","15":"tag-united-states","16":"tag-unitedstates","17":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115409458501141636","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/319908","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=319908"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/319908\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/319909"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=319908"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=319908"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=319908"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}