MBA forecast: Mortgage volume to dip below $2T in 2027 as 7% rates linger
Trade group projected higher-for-longer borrowing costs, wider spreads and potential Fed hikes ahead
The Mortgage Bankers Association's forecast of mortgage volume dipping below $2 trillion in 2027 is significant for the real estate industry, particularly for those considering leasing as an alternative to buying. With higher borrowing costs and wider spreads expected to persist, potential homebuyers may be deterred from entering the market, leading to increased demand for rentals. As a result, landlords and property managers may see an uptick in interest for their properties, potentially driving up lease prices.
As interest rates linger around 7%, the rental market is likely to become even more competitive, with more people opting to lease rather than buy. This shift in demand could lead to a surge in rental applications, allowing landlords to be more selective with their tenants and potentially increase lease rates. Furthermore, the forecasted decline in mortgage volume may also lead to a decrease in new construction projects, which could further limit the supply of available rentals and drive up prices.
As the market continues to evolve, it will be important to watch how the lingering higher interest rates affect lease renewal rates and tenant retention. If lease prices continue to rise, tenants may start to look for alternative options, such as shared housing or shorter-term leases. Additionally, the potential for further Fed hikes will be crucial to monitor, as it could lead to even higher borrowing costs and further exacerbate the trend towards leasing over buying. The intersection of these factors will be key to understanding the future of the rental market and the implications for leaseholders and property owners alike.
Originally reported by housingwire.com. LeaseNews adds analysis for real estate & property readers.