Fannie Mae sharply raises mortgage rate forecast for 2027
Fannie Mae significantly increased its mortgage rate projections, signaling a much tougher housing market ahead for buyers. The updated economic outlook expects 30-year mortgage rates to average 7.4% this quarter and climb to 7.5% through 2027. This marks a substantial upward revision from earlier projections of 6.7% to 6.8%. High borrowing costs continue to severely weigh on purchase activity, driving down mortgage demand and extending the slump in home sales nationwide. The persistent high-rate environment also points to broader economic consequences for commercial real estate beyond standard home transactions.
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- ✓ Fannie Mae now expects 30-year mortgage rates of 7.4% this quarter and 7.5% through 2027.
- ✓ The updated projection is up from earlier estimates of 6.7% to 6.8%.
- ✓ US mortgage rates recently hit 7.5%, extending a slump in purchase activity.
What changed
Fannie Mae issued a revised October 2026 forecast that sharply raises expected 30-year mortgage rates to 7.5% through 2027.
Live updates
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Fannie Mae Sharply Raises Mortgage Rate Forecast for 2027
Fannie Mae significantly increased its mortgage rate projections, signaling a much tougher housing market ahead for buyers. The updated economic outlook expects 30-year mortgage rates to average 7.4% this quarter and climb to 7.5% through 2027. This marks a substantial upward revision from earlier projections of 6.7% to 6.8%. High borrowing costs continue to severely weigh on purchase activity, driving down mortgage demand and extending the slump in home sales nationwide. The persistent high-rate environment also points to broader economic consequences for commercial real estate beyond standard home transactions.
Why it matters
Housing affordability has remained severely constrained as borrowing costs hover near multi-year highs. Previous expectations pointed toward gradual relief and lower borrowing costs entering 2027, but persistent market pressures forced economists to revise their estimates upward. These elevated rates continue to depress transaction volumes across the residential housing sector.
What is confirmed
- Fannie Mae now expects 30-year mortgage rates of 7.4% this quarter and 7.5% through 2027.
- The updated projection is up from earlier estimates of 6.7% to 6.8%.
- US mortgage rates recently hit 7.5%, extending a slump in purchase activity.
Still unconfirmed
- Some market analysts speculate that 30-year mortgage rates could climb as high as 8% next.
What to watch next
- Future updates to Fannie Mae or Federal Reserve macroeconomic projections
- Actual monthly existing home sales and mortgage purchase application volume reports
confidence 100%Sources used for this update (16)
- www.cnbc.com — Stock Markets, Business News, Financials, Earnings - CNBC
- Yahoo Finance — Is 8% next? Why mortgage rates have surged, and may stay higher for longer
- The Washington Post — It’s a great time to buy a house — if you can stomach a 7% rate
- CNBC — Fannie Mae sharply raises mortgage rate forecast for 2027
- Bloomberg.com — US Mortgage Rates Hit 7.5%, Extending Slump in Purchase Activity
- Norada Real Estate Investments — Mortgage Rates Today, October 14, 2026: 30-Year Refinance Rate Drops by 23 Basis Points
- Mortgage News Daily — Mortgage Rates Inch to Another 2-Week Low
- www.jezebel.com — Former Fox News Host to Livestream Execution by Firing Squad
- seekingalpha.com — Weekly Commentary: Hope I'm Wrong
- www.cnbc.com — Fannie Mae sharply raises mortgage rate forecast for 2027 - CNBC
- themortgagepoint.com — Fannie Mae Raises Mortgage-Rate Forecast Sharply for 2027
- finance.yahoo.com — Fannie Mae Raises Mortgage Rate Forecast to 7.5% for 2027
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