The Zhitong Finance App learned that the pressure on high interest rates in the US real estate market may continue for a longer period of time. American home mortgage lender Fannie Mae recently raised its mortgage interest rate forecast for the fourth quarter of 2026 and the full year of 2027. It is expected that the average interest rate for 30-year fixed mortgages in the US will reach 7.4% in the fourth quarter of this year and remain at 7.5% throughout 2027. Previously, Fannie Mae's forecasts for the above two periods were 6.8% and 6.7%, respectively.
This means that Fannie Mae raised its mortgage interest rate forecast for the fourth quarter of this year by 0.6 percentage points and raised its forecast for the full year of 2027 by 0.8 percentage points, reflecting continued high US inflation, rising bond yields, and changes in monetary policy prospects, which are significantly changing the market's expectations for future housing financing costs.
As of Tuesday, the average interest rate on 30-year fixed mortgages in the US had risen to 7.46%, according to Mortgage News Daily. Mortgage interest rates are likely to continue to rise on Wednesday as newly released inflation figures beat market expectations and bond yields rose further.
In fact, interest rates on US mortgages have continued to rise sharply since the beginning of September. Stubborn inflationary pressure, a sell-off in the bond market, and the Federal Reserve's further tightening of monetary policy are jointly driving up the cost of housing loans rapidly.
Previously, the Federal Reserve raised interest rates for the first time in more than three years. Although mortgage interest rates will not change exactly at the same time as the Federal Reserve's benchmark interest rate, market expectations about the Fed's future inflation judgment and policy path will still have an important impact on mortgage interest rates.
Interest rates on US 30-year fixed mortgages are usually closely related to 10-year US Treasury yield trends. Recently, 10-year US Treasury yields have continued to rise, driven by factors such as rising oil prices and growing concerns about the global economic outlook, further driving up housing financing costs.
The impact of high interest rates has already begun to be felt in the US real estate market, and the traditional home buying market in the fall is entering a phase of significant cooling ahead of schedule. According to data from real estate platform Zillow, US housing sales to be completed fell 8.5% year-on-year in September. This indicator mainly reflects second-hand housing transactions that have signed a home purchase contract but have not yet completed delivery, and is regarded as an important leading indicator for measuring future housing sales activities.
At the same time, demand for mortgage applications in the US continues to drop sharply, indicating that the double pressure of high housing prices and high interest rates is further weakening the affordability of housing for buyers. For potential buyers, rising mortgage interest rates not only mean an increase in monthly repayment amounts, but may also directly affect whether they can obtain bank loan approval.
As borrowing costs rise, some families that are already capable of buying a home may have to lower their home purchase budget or even delay their home purchase plans. Other buyers may be disqualified from applying for a mortgage because the ratio of income to debt burden no longer meets the requirements of the lender. This means that the impact of high interest rates on the US real estate market is not limited to suppressing the desire to buy a home, but also further narrowing the pool of potential buyers who are eligible for loans.
It is worth noting that Fannie Mae's sharp increase in interest rate forecasts means that the fall in financing costs previously anticipated by the US real estate market may be further delayed. If interest rates on 30-year fixed mortgages remain around 7.5% throughout 2027, buyers will continue to face high monthly payment pressure, and real estate transaction activity may also continue to be suppressed.
As far as the real estate market is concerned, mortgage interest rates have been high for a long time, and may also exacerbate price differences between buyers and sellers. Buyers are more cautious due to rising financing costs, while sellers may be unwilling to cut prices drastically, leading to extended housing transaction cycles and continued sluggish market volume.