Mortgage Rates Will Drop Below 6% This Year, Says Fannie Mae
Fannie Mae, a government-sponsored enterprise that purchases home loans from mortgage lenders, recently released a report predicting that mortgage rates will begin to come down slowly from their current mid-6% range levels.
According to Money, 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.
Fannie 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.