Mortgage rates are tracking higher alongside the 10-year Treasury yield, with industry experts projecting rates to hover near 6.7% through 2027 despite ongoing housing market supply constraints.
Average 30-year fixed mortgage rates climbed to 6.95% this week, driven by volatility in the bond market and a 10-year Treasury yield exceeding 5%. Fannie Mae forecasts suggest rates will remain near 6.7% through 2027, signaling a prolonged period of elevated borrowing costs for prospective homebuyers.
While mortgage rates are not directly set by the Federal Reserve, they typically mirror trends in the 10-year Treasury yield, which has been volatile and recently topped 5%.
Experts suggest that waiting may not be effective, as lower rates often trigger increased demand, which can drive home prices higher due to the current limited housing supply.