According to Fannie Mae, 30-year fixed mortgages are likely. If mortgage rates fall back to the mid-range of -4%, there is likely to be an increase in demand and a rebound in home sales once again. Rate hikes, together with rising home prices, have reduced housing affordability by 29% over the past year, representing the sharpest annual decline in history. While demand for refinancing is expected to increase if mortgage rates fall back into the 4% range, it might not be enough to save many lenders.
That potential buyer may want to become a tenant in the short term, as mortgage rates become too onerous for them, so in the short term there could be excellent opportunities for passive income to keep you going. Freddie Mac (the Federal Mortgage Mortgage Corporation) said that the 30-year rate hike marked the biggest one-week +increase in his survey since 1987, adding that higher rates are the result of a change in expectations about inflation and the course of monetary policy. While rate growth has slowed in recent weeks, mortgage rates continue to trend well above the levels seen in the early days of the pandemic. As house prices have risen along with interest rates, 30-year fixed mortgage rates have risen from their pandemic level of 2.68% to 6.3%.
This year's rapid change in rates has added hundreds of dollars to the monthly payment of a typical mortgage, not only reducing home affordability, but also preventing some buyers from qualifying for a mortgage they would have been approved for a year ago. We publish long-term forecasts for the euro rate, other currencies, the prices of crude oil and gold, LIBOR and EURIBOR, etc. Even in the high-interest mortgage market of the 80s and early 90s, investors created generational wealth in the real estate sector.