Key facts
- Fannie Mae's 2027 mortgage origination forecast reduced by 18% to $1.86 trillion.
- 30-year mortgage rates are now expected to average 7.5% in 2026.
- Refinance originations for 2027 are projected at $430 billion, down from $802 billion.
- Purchase originations are forecast to total $1.4 trillion in 2027.
- MBA projects mortgage rates above 7% through 2027.
- MBA forecasts a 5% decline in single-family originations to $1.99 trillion in 2027.
Fannie Mae's Economic and Strategic Research Group has significantly lowered its 2027 mortgage origination forecast, projecting $1.86 trillion in single-family originations, down from $2.27 trillion previously. This revision is driven by expectations that mortgage rates will remain elevated, with 30-year rates anticipated to average 7.5% in 2026. Consequently, refinance activity is expected to be halved from prior estimates, while purchase originations are forecast to remain flat. The group maintained its real gross domestic product growth forecast at 2.5%, indicating that the weaker mortgage outlook is primarily a function of interest rates rather than recessionary fears. Inflation expectations have slightly increased, with the CPI now projected to rise 1.9% year-over-year in the fourth quarter of 2027. Gagan Sharma, founder and CEO at BSI Financial, noted that rates have risen beyond expectations, making servicing more expensive. The Mortgage Bankers Association also anticipates elevated rates and subdued volume, forecasting 30-year mortgage rates above 7% through 2027 and a 5% decline in total single-family originations to $1.99 trillion in 2027. The MBA's analysis suggests continued consolidation among independent mortgage banks.