We expect the Fed to cut rates on Wednesday, says Mortgage Bankers Association's Fratantoni

Mortgage Rate Outlook - Mortgage Bankers Association forecasts mortgage rates to remain above 6% through 2028 [1] - Expects the Federal Reserve to cut rates three to four times in the next six months [3] - Rising term premiums and concerns about debt and deficit will push up 10-year Treasury yields, impacting mortgage rates [4] - Mortgage rates are closely tied to the longer end of the yield curve, specifically 10-year Treasuries [4] Housing Market Analysis - 2023 was the low point for the housing and mortgage market [6] - Home sales are expected to increase by about 5% in 2026 [7] - Existing inventory has increased by approximately 30% compared to last year [11] - Builders are offering buy-downs, potentially permanent, to move new construction inventory, which is at nine months of supply [13][14] Buyer and Seller Dynamics - First-time buyers have acclimated to the 6% to 6.5% rate range [10] - Move-up buyers with lower locked-in rates (e g, 3%) are reluctant to give them up [10] - Increased inventory benefits buyers with more options, but challenges sellers as it takes longer to sell and home prices have flattened [8]