NewsFannie Mae slashes 2027 mortgage forecast to $1.86 trillion amid higher rates
Fannie Mae cut its 2027 mortgage forecast by eighteen percent. Thirty-year rates are projected to average seven and a half percent. Refinance volume takes the biggest hit in the new outlook. Purchase originations will stay flat as the market remains tight. Your next home loan or refinance just got h
Fannie Mae's Economic and Strategic Research Group just reduced its 2027 U.S. mortgage origination forecast to $1.86 trillion, an 18% cut from September, after revising rate assumptions about 80 basis points higher according to HousingWire. Fannie Mae now projects 30-year mortgage rates to average 7.5% in 2026. The shift signals that mortgage rates are expected to stay higher and refinance volume will remain weak for years to come. For this year, Fannie Mae economists still expect about $2 trillion in volume. Refinance activity takes the brunt of the revision, dropping to about $430 billion in 2027 from a prior $802 billion estimate. Purchase originations are forecast to total $1.4 trillion in 2027, essentially flat with this year, underscoring that the market will remain purchase-driven. Meanwhile, the Mortgage Bankers Association expects total single-family mortgage originations to decline 5% to $1.99 trillion in 2027. Marina Walsh, vice president and head of industry analysis at the Mortgage Bankers Association, pointed out that independent mortgage banks dropped from 881 companies at the height in 2021 down to 707 at the end of 2025. "There has been a movement toward consolidation," Marina Walsh said. For your business or your next real estate deal, higher borrowing costs mean fewer buyers can qualify without creative financing. When the big secondary market player moves its numbers down, every local lender tightens its belt.