News Desk / Forecasts and the Fed
Fannie Mae now expects 7.5% mortgage rates through 2027
Fannie Mae's economists raised their mortgage rate forecast by almost a full point in one month and now see no relief through 2027. A reminder of how fast forecasts move.
The numbers
Fannie Mae raised its mortgage rate forecast sharply in October 2026. Its Economic and Strategic Research Group now expects the 30-year fixed rate to average 7.4% in the fourth quarter of 2026 and 7.5% in every quarter of 2027, as reported by Mortgage Professional America on October 14 and Florida Realtors on October 16. In September, the same group expected 6.8% for this quarter and 6.7% for 2027.
The new forecast was built on rates as of September 30. Freddie Mac's weekly average has since reached 7.40%, so actual rates were already running at the forecast level when it came out.
Fewer sales, flatter prices
- Existing-home sales, 2027: 4.06 million, down from 4.22 million in the prior forecast.
- Total home sales, 2027, new homes included: 4.71 million, down from 4.88 million.
- Home prices, 2027: up 0.6%, down from 1%.
- Refinance volume, 2027: about $430 billion, roughly half the earlier estimate.
How much should anyone trust a rate forecast?
Look at how this one moved. In August, Fannie Mae expected 6.8% for late 2026 and 6.7% for the second half of 2027 (Scotsman Guide, August 19). Two months later, 2027 is 7.5%. Forecasters revise as inflation, the Fed and bond markets move: the Fed raised its benchmark rate on September 16, and its next meeting is October 27 and 28.
A forecast is a scenario, not a promise. It is useful for planning a range ("rates between 7% and 8% next year"), not for telling a client what their rate will be next spring.
What to tell your clients
Buyers waiting for rates to fall: Fannie Mae's economists no longer expect that through 2027. That does not make it impossible, but it changes the question from "when will rates drop?" to "can this payment work now, and can I refinance if they do?"
Sellers waiting for buyers to come back: if rates stay near 7.5%, the buyers who are shopping now are the market. Waiting a year for lower rates means a year of carrying costs with no forecast backing it.
Avoid promises: skip "marry the house, date the rate." A refinance is possible only if rates fall and the borrower still qualifies.
Today's numbers
Where the market stands now
The story above is dated October 21, 2026. These update on their own as the publishers release new data.
Questions
Quick answers
What does Fannie Mae predict for mortgage rates?
Its October 2026 forecast calls for the 30-year fixed to average 7.4% in the fourth quarter of 2026 and 7.5% in each quarter of 2027.
Will mortgage rates go down in 2027?
Fannie Mae's economists do not expect it; their October 2026 forecast holds 7.5% all year. Forecasts change often: in August they expected about 6.7%.
What does Fannie Mae forecast for home prices?
Growth of 0.6% in 2027, down from 1% in its previous forecast.
Sources
- Mortgage Professional America, “Fannie Mae just dramatically upped its 2027 mortgage rate expectations,” October 14, 2026. www.mpamag.com
- Florida Realtors, “Fannie Mae raises 2027 mortgage rate forecast,” October 16, 2026. www.floridarealtors.org
- Scotsman Guide, “Fannie Mae sharply raises mortgage rate forecast through mid-2027,” August 19, 2026. www.scotsmanguide.com
- Freddie Mac, “Primary Mortgage Market Survey, weekly history,” October 15, 2026. www.freddiemac.com
Written by the AgentCOS News Desk in our own words from the sources above. Numbers are as published on the dates shown; publishers sometimes revise them later.