If you expected lower mortgage rates to make buying a home slightly cheaper this spring, consider your hopes dashed, experts say.
The Federal Reserve put a hold on interest rate cuts last week and tweaked plans for its balance sheet, actions that may not raise mortgage rates significantly, but will likely keep them elevated, analysts say.
“It does seem like mortgage rates are going to stay where they are for the foreseeable future,” said Eric Orenstein, senior director of nonbank financial institutions at research firm Fitch Ratings.
The current rate for a 30-year fixed mortgage is 7.55%. While that’s down from a recent peak of 8% in October 2023, it’s far above the 3% range that preceded the Fed’s rate-hiking campaign from 2022 to 2023, which lifted the cost of borrowing for consumers and businesses to curb high inflation.
For people who sat out 2023 hoping for a better market this year, purchasing a home this spring will be more like deja vu instead, with expensive homes and high mortgage rates similar to last year.
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How have expectations for mortgage rates changed this year?
Most analysts see mortgage rates hovering at elevated levels of between 6.5% and low-7% through the rest of the year. That range is higher than some predicted earlier this year.
See mortgage rates:Check the latest
Here’s a rundown of how some forecasts have evolved:
To illustrate how the change in outlooks could affect your pocketbook, take a $240,000 loan.
At Fannie…
