Want more housing market stories from Lance Lambert’s ResiClub in your inbox? Subscribe to the ResiClub newsletter.
Economic forecasting has never been an easy task, and it becomes even more challenging when confronted with unprecedented economic events like COVID-19 lockdowns and unparalleled levels of government intervention, followed by a rapid cycle of interest rate hikes.
Look no further than recent mortgage rate forecasts. Last year marked the third year in a row that mortgage rates ended the year higher than forecasters expected.
Will they finally get it right this year?
ResiClub’s latest roundup of quarterly mortgage rate forecasts shows that most forecasters still expect mortgage rates to gradually decrease over the next 18 months.
The average 30-year fixed mortgage rate as of Thursday was 6.96%.
By the final quarter of 2025, Fannie Mae expects that to slide to 6.6%. Meanwhile, Wells Fargo’s model expects 6.5%, and the Mortgage Bankers Association estimates 6.5%.
But even if those forecasts are right, it would mean that housing affordability would still remain strained in 2025 and 2026.
