Mortgage Rates Surge as Goldman Sachs Adjusts Forecast

Goldman Sachs has revised its forecast on mortgage rates, now predicting rates of 7.1% by the end of 2023 and 6.8% by the end of 2024, higher than their previous estimates. The change reflects the Federal Reserve's indication that it won't be cutting rates anytime soon and the potential for another rate hike this year. The surge in Treasury yields, driven by rising fiscal deficits and increased bond supply, is putting pressure on mortgage rates. As a result, mortgage applications for home purchases are at their lowest level since 1995, and residential mortgage lending activity has declined. Goldman Sachs has also lowered its 2024 mortgage origination forecast.