Waiting for homebuying to get more affordable? Here's what to expect in 2027
Mortgage rates aren't expected to get much cheaper for homebuyers in 2027, especially if inflation stays high.
TL;DR
- Mortgage rates are predicted to stay near 7% in 2027, with Fannie Mae and the Mortgage Bankers Association forecasting an average of 6.7%.
- High inflation is identified as the primary culprit for affordability challenges, driving up Treasury yields and, consequently, mortgage rates.
- Buyers' purchasing power is diminishing as inflation outpaces wage growth, while home prices are projected to increase by 2.2% nationally in 2027.
- Increased costs for building materials, driven by tariffs and higher oil prices due to the war in Iran, along with skilled worker shortages, are making new home construction more expensive and less available.