Mortgage Rates Will Drop Below 6% This Year, Says Fannie Mae
Homebuyers could be in line for a big break by the end of the year as mortgage rates are expected to dip under 6% for the first time since September 2022.
A recent report from Fannie Mae, a government-sponsored enterprise that purchases home loans from mortgage lenders, is predicting that mortgage rates will begin a slow, if somewhat bumpy, descent from their current levels in the mid-6% range. The rate on a 30-year fixed-rate loan is forecast to average 5.8% by the end of the year. Some other recent mortgage rate predictions, meanwhile, are saying that rates will stay above 6% this year.
Rates have already decreased by more than a percentage point since last October. If Fannie Mae’s current prediction comes true, the rate will have gone down by almost two percentage points from its 2023 high of 7.79% — a change that will have an increasingly significant impact over time for homebuyers and sellers.
Find Your Actual Rate at Rocket Mortgage (NMLS #3030) Today!
View RatesFannie Mae’s rate new forecast is slightly more optimistic than its previous ones because the Federal Reserve recently signaled a “pivot” in its monetary policy, says Doug Duncan, Fannie Mae’s chief economist. The Fed is switching from its rate-tightening policy toward a sustained pause and eventual decrease in the federal funds rate, which will likely nudge mortgage rates lower.
