Former OMB housing official predicts surprising mortgage rate 'new normal'
Home buyers should be prepared for one mortgage rate reality.
After two decades of stability, mortgage rates skyrocketed in 2022 and 2023 and have yet to recover fully. Mortgage rates rose when the Fed implemented consistent interest rate hikes to stifle inflation and hoped to lower rates once inflation had been tamed.
Despite three rate decreases at the end of 2024, mortgage rates rose consistently for four months, which is incongruous with how mortgages typically react to interest rate cuts.
Most economists and housing experts initially predicted mortgage rates to fall to 5% by the end of 2025, but now most forecasts don’t foresee rates declining to 6% before 2027.
