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Mortgage rates may ease toward year end, but housing recovery looks slow

Zillow Research projects mortgage rates will average about 6.5% by year end, but higher borrowing costs are expected to weigh on housing activity in the second half of the year.

Reported · Written up by our desk · Residential

Zillow Research said recent jobs and inflation data have reduced pressure on mortgage rates, giving the Federal Reserve more room to pause.

Even with cooling inflation and softer jobs, Zillow forecasts mortgage rates falling only to around 6.5% by year end.

Zillow Research warned that elevated borrowing costs are still likely to slow housing activity in the second half, despite the near term easing in mortgage rate pressure.

The outlet’s view is that the Fed may get a breather on rates for now, but housing faces an uphill climb as affordability remains constrained.

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