Fannie Mae just dramatically upped its 2027 mortgage rate expectations
Selma Hepp, chief economist at Cotality, has made a similar case. “It’s really the bond market,” she said, while warning that mortgage rates could hit 9%.
“It’s possible that mortgage rates go up to 9%, but it’s really not our base case scenario. It’s more of a severe scenario in which Treasuries go up to 6% or 7% and that would be really triggered by several major disruptions.”
Mike Fratantoni, Joel Kan, and Marina Walsh of the Mortgage Bankers Association expect mortgage originations to fall in 2027, with rates remaining above 7% and refinance opportunities staying limited despite steady purchase activity. https://t.co/3WmwWuhSWh
— Mortgage Professional America Magazine (@MPAMagazineUS) October 13, 2026
What higher rates mean for broker pipelines
The lending projections show the cost. Fannie Mae now expects single-family originations to fall from about $2.09 trillion in 2026 to $1.87 trillion in 2027, a drop of roughly 11%. Purchase volume holds near $1.43 trillion.
Refinance lending, however, shrinks from $655 billion to $430 billion, which cuts the refinance share of originations from 31% to 23%.
Home price growth also slows: Fannie Mae’s Home Price Index is forecast to rise just 0.6% in 2027, down from 2.7% this year.
