Mortgage Rates Above 7.5% Now But Forecast to Fall to 5.5% by 2025, Boosting Home Buying

Mortgage rates are currently over 7.5% but expected to fall to 6.1% by end of 2024 and 5.5% by end of 2025 according to Mortgage Bankers Association forecast.

MBA predicts rates will fall due to slowing economy, rising unemployment, and declining inflation which will lead Fed to stop hiking rates.

MBA forecasts mortgage origination volume to increase 19% in 2024 to $1.95 trillion from $1.64 trillion expected in 2022.

2021 was record year for mortgage industry with $4.4 trillion originated but high rates in 2022 have dampened home buying activity.

MBA expects little change in Fed rates for rest of 2022 but "a little more pain" for mortgage lenders until rebound in spring 2024.