Fannie Mae economists expect mortgage rates to drop to drop below 6 percent by the end of this year, but their outlook isn’t all good news.
The government-sponsored enterprise also forecasts that if there isn’t significant supply growth, home prices will keep rising as well.
The economists at Fannie Mae expect the rate reduction to begin as early as May. They noted that their forecast for the U.S. economy centers around slow growth given that there are still factors in play that are highly correlated with a recession.
The potential timeline portends that rate cuts will come in May, June, and December. Somewhere in the middle of June and Decemenber, the Fed may pause to see what the data looks like. The experts said they didn’t think the fact that it is an election year will play heavily or at all into the Fed’s timing decisions.
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