Mortgage rates forecast

Monetary policy officials have finally gone a month without tightening but made it clear more action could lie ahead, suggesting it could be awhile before housing finance costs consistently fall.

The home price increases and the ongoing inventory shortage made buying conditions difficult and many think it’s only getting more challenging, according to RealtyTrac.

Tight inventory and heightened competition kept prime purchasers at bay as property values continued their summer surge, according to Fannie Mae.

The GSE forecasts $4 trillion in production this year because refinance activity is stronger than expected.

Home prices grew at a record annual pace in April but indicators of a possible slowdown popped up in May, Redfin noted.

Economic recovery should soar into the summer as vaccination rates climb and restrictions loosen up, but low inventory is likely to limit mortgage activity into the next year, according to Fannie Mae.

Rising cases and vaccine issues caused bond yields to fall, but inflationary pressures will likely reverse that course.

After a booming 2020, more mortgage lenders than ever before expect diminishing margins in the coming months as climbing interest rates set up heightened competition.

Investors were also reacting to the inauguration of Joe Biden and uncertainty over additional fiscal relief, Freddie Mac’s Chief Economist Sam Khater said.

Despite mortgage rates expected to rise modestly in 2021, a bolstered Biden administration stimulus package and COVID-19 vaccination efforts bring promise for economic recovery.