Mortgage rates could go up to 8% after the U.S. Federal Reserve refrained from raising its policy interest rate again on Wednesday but forecast rates would stay high through next year, real estate economists say.
With the 10-year Treasury note BX:TMUBMUSD10Y yield heading towards 4.5% on Thursday in the wake of the Fed’s decision mortgage rates could be “substantially higher in the short run,” Lawrence Yun, chief economist at the National Association of Realtors, said during a press call discussing existing home sales for the month of August.As of Thursday morning, the 10-year Treasury note yield was over 4.4%.
With the Fed keeping another fed funds rate hike in its back pocket, “mortgage rates are not likely to drift lower in the absence of new data warranting a reconsideration of the outlook,” Danielle Hale, chief economist at Realtor.com, said in a statement. “This means that the affordability headwinds that buyers face are likely to continue.”