Relief from high mortgage rates isn't coming soon, experts say

Experts indicate that high mortgage rates are likely to persist, as the Federal Reserve has paused interest rate cuts and adjusted its balance sheet strategy. Current rates for a 30-year fixed mortgage hover around 7.55%, significantly higher than rates before the Fed's rate hikes aimed at controlling inflation. Predictions for future rates have risen, with most forecasts now expecting them to remain between 6.5% and 7% by year-end.

The Federal Reserve's approach to managing its mortgage-backed securities (MBS) could further influence mortgage rates. If the Fed reduces its MBS holdings faster due to increased prepayments from home sales, this could push mortgage rates higher. However, with a slower housing market, significant increases in mortgage rates seem less likely, though a substantial drop in rates also appears unlikely amidst ongoing economic pressures.