Business & Finance
Forecasts indicate persistent housing affordability challenges in 2027
High mortgage rates, driven by inflation and global conflicts, are expected to keep borrowing and construction costs elevated.
The short version
- Fannie Mae and the Mortgage Bankers Association have revised their mortgage rate forecasts upward, now expecting 30-year fixed rates to average 6.7% in 2027.
- A survey of housing experts predicts national home prices will rise by 2.2% in 2027, compounding affordability issues for prospective buyers.
- Economic pressures, including high inflation, new tariffs, and the war in Iran, are raising the costs of building materials and keeping mortgage rates high.
Key facts
- Fannie Mae and the Mortgage Bankers Association both project that 30-year fixed mortgage rates will average 6.7% in 2027.[CNBC]
- The average 30-year fixed mortgage rate was recently recorded at 6.81% according to Mortgage News Daily.[CNBC]
- A Fannie Mae survey of over 100 housing experts forecasts national home prices to increase by 2.2% in 2027.[CNBC]
- The Federal Reserve's preferred measure of inflation rose 3.7% in July from a year earlier, remaining above its 2% annual target.[CNBC]
- Average hourly earnings declined at an inflation-adjusted annualized rate of 1.66% during the first half of 2026, reducing purchasing power.[CNBC]
- According to the National Association of Home Builders, tariffs on materials like lumber and steel, labor shortages, and higher oil prices due to the war in Iran are driving up home construction costs.[CNBC]
What remains uncertain
- Realtor.com's projection of mortgage rates averaging 6.3% for the remainder of 2026 may prove too optimistic given ongoing inflation and geopolitical volatility.[CNBC]