Fannie Mae Forecasts 7.5 Percent Mortgage Rates For 2027, Goldman Sees 6.4 Percent

Mortgage rates are expected to stay elevated into 2027, with Fannie Mae forecasting an average 30-year rate of 7.5 percent next year. Goldman Sachs projects 6.4 percent by late 2027. The average 30-year rate reached 7.4 percent in mid-October, compared with 6.27 percent a year earlier, Freddie Mac data showed.

The rate outlook comes as the housing market shows little movement in either direction. Existing-home sales were down slightly year over year in September. The median existing-home price stood at $417,500 in September, a 1.3 percent increase from a year earlier.

Goldman Sachs expects rate lock-in effects to fade gradually after 2027. The firm's view on equity gains was echoed by TheStreet: "That fits Goldman's view that the big equity gains are mostly behind us." Goldman does not project rates falling below 6.4 percent through late 2027.

The median first-time buyer is now 40 years old, and older millennials have built equity in their homes. "For millennials who are on the wrong side of that line, the wait keeps getting longer," TheStreet reported. Buyers without home equity face borrowing costs near 7.5 percent under Fannie Mae's forecast.

Fannie Mae's 7.5 percent projection and Goldman's 6.4 percent estimate represent the two divergent paths for mortgage rates through 2027.