Jeff DerGurahian, loanDepot’s chief investment officer and head economist, expects U.S. mortgage rates to stay near 7% through year-end, as the latest national average remains above that level.
Freddie Mac reported an average of 7.40% for a 30-year fixed mortgage on Oct. 15. The reading was unchanged from the previous week and above 6.27% in the comparable week a year earlier.
DerGurahian’s outlook reflects two pressures he sees in markets. He said weaker stock prices may steer buyers toward bonds, while higher oil prices could heighten inflation concerns and raise the chance of another Federal Reserve rate increase.
The Fed raised its target range by a quarter percentage point to 3.75% to 4.00% on Sept. 16. A change in that short-term target does not automatically produce the same move in mortgage rates, which also reflect longer-term borrowing conditions.
Higher rates can reduce how much buyers can finance and make refinancing less attractive for homeowners with lower-rate loans. In Florida, Florida Realtors Chief Economist Brad O’Connor linked rising mortgage rates to a pause in modest home-sales growth, as covered in our report on Florida home sales.
