Forecasts for 2027 indicate that 30-year fixed mortgage rates are expected to remain close to 7%, with Fannie Mae and the Mortgage Bankers Association having revised their estimates upward. Inflation remains the determining factor: the Fed’s preferred measure rose 3.7% in July, well above the 2% target, and tariffs as well as the war in Iran are putting upward pressure on prices. Buyers are facing home prices roughly 59% higher than in 2020, and these prices are expected to continue rising by 2.2% in 2027 according to Fannie Mae. At the same time, homebuyers’ purchasing power is eroding due to inflation, with real hourly wages declining at a 1.66% annualized rate during the first half of 2026.
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