Mortgage Rates Predicted to Stay Stable, Boosting Refinancing and Home Purchases
Mortgage rates are expected to remain stable to slightly rise over the next 18 months, with medium- to long-term fixed rates staying low but at risk of gradual increases. Meanwhile, refinancing activity is surging as homeowners take advantage of lower rates, and home loan affordability is improving, potentially boosting demand for home purchases.
Economists and organisations predict stable to slightly rising mortgage rates in the coming months, influenced by economic recovery and inflation. Swiss forecasts suggest possible rate stability or slight declines due to expected SNB rate cuts. However, experts warn of rising building loan interest rates up to around 4% driven by economic stimulus and higher state debt. Short-term rates may fluctuate sideways.
Refinancing activity is on the rise, with more homeowners seeking to capitalise on lower rates. The cooling job market and lower Treasury yields are significant contributing factors to the decrease in mortgage rates. The 30-year fixed mortgage rate today stands at 6.49%, down 1 basis point from last week. The Federal Reserve's upcoming September meeting is expected to result in a 0.25% rate cut, which will likely bring mortgage rates down further. Forecasts indicate that mortgage rates will likely remain above 6% for the foreseeable future but could slowly ease into 2026. Market experts expect mortgage rates to stay above 6% through 2025 but drop slightly in 2026. The 30-year fixed refinance rate today is 6.46%, down 29 basis points from last week.
While mortgage rates are expected to remain historically elevated compared to the ultralow rates during the pandemic era, the recent decline encourages refinancing activity and helps overcome affordability challenges. Homeowners are urged to monitor the market and consider locking in rates while they remain relatively low.
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