"Fannie Mae Analysts Predict Mortgage Rates to Drop Below 6% in Coming Year"

Fannie Mae analysts predict that the average 30-year mortgage rate will drop below 6% this year, down from the current 6.6%, as demand for U.S. government bonds increases due to a slowing economy. This is expected to boost refinancings and help alleviate the "lock-in effect" in the housing market, but a full recovery to pre-pandemic sales rates is anticipated to take years due to stretched housing affordability. Additionally, a separate forecast suggests that the average U.S. home price will only grow modestly in the low-to-mid single digits this year, indicating a gradual recalibration in the housing market.