Fannie Mae Expects Lower Mortgage Rates by Year-End Due to Fed's Eased Approach

"Fannie Mae Expects Lower Mortgage Rates by Year-End Due to Fed's Eased Approach"

WASHINGTON - Fannie Mae has updated its mortgage rate forecast, now expecting rates to drop to around 5.8% by year-end. This adjustment comes at a time when the Federal Reserve signals a more relaxed approach to its monetary policy, potentially leading to more affordable borrowing costs for homebuyers. At the same time, Freddie Mac has reported a decline in the average fixed mortgage rate to approximately 6.60%, marking the lowest point since May of the previous year.

The housing market is poised for growth in this environment of declining mortgage rates. Home sales are projected to reach nearly 5 million annually, with housing starts surpassing 1.3 million. Additionally, home prices are expected to experience a moderate uptick, with a forecasted housing price index increase of over 3% throughout this year.

This trend suggests potential relief for challenges facing the housing market, which could bolster buyer confidence and stimulate home sales and construction activity. With mortgage rates pulling back from their recent highs, the housing sector may be gearing up for a more robust performance in the coming months.

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