Fannie Mae forecasts that the average rate for 30-year fixed-rate mortgages will stand at 6.8% in the fourth quarter of 2026 and will remain at this elevated level until the first half of 2027. This assessment comes from the latest housing market report for August, published this week by the mortgage financing giant's Economic and Strategic Research Group.
This reassessment represents an extension of the timeframe during which US home buyers must expect persistently high financing costs. The previously expressed expectation of a near-term interest rate reduction is thus being revised. The analysis underscores the ongoing challenges in the US housing market, which continues to be characterised by low supply and high demand.
The forecast suggests that housing affordability will continue to be an obstacle for many prospective buyers. High mortgage rates reduce the maximum loan amount households can afford and directly impact monthly outgoings. This could lead to a sustained slowdown in transaction volumes in the property market, as buyers postpone their decisions or wait for more favourable conditions.
Experts at Fannie Mae point out that the ongoing strength of the US economy and potentially more persistent inflation could prompt the Federal Reserve to maintain its restrictive monetary policy for longer than initially assumed. This would have direct implications for short and long-term interest rates and keep mortgage financing costs high.
The adjustment of expectations regarding mortgage rate development signals a longer period of uncertainty for the US housing market. Property professionals and buyers are advised to prepare for a persistently challenging financing environment. It remains to be seen how this development will affect price stability and the regional dynamics of the market, with stagnation or even slight corrections in some segments not being ruled out.
- —Forecast: 30-year fixed-rate mortgages at 6.8% until mid-2027.
- —Extended period of high interest rates compared to previous estimates.
- —Ongoing challenge for housing affordability.
