Morgan Stanley predicts major mortgage rate changes are coming soon
Economic developments may impact the housing market in an unexpected way over the next two years.
When mortgage rates surged in 2022, doubling from 3.5% to nearly 7%, it marked an end to the Covid-era housing boom. Stubborn mortgage rates have kept the market at a standstill, making purchasing a home more expensive for buyers and discouraging sellers from listing their homes.
Although mortgage rates were initially projected to drop notably in 2025, sticky inflation and economic uncertainty have kept them above 6.5%, despite three consecutive interest rate cuts at the end of 2024.
