Last week I asked all of you what happens to mortgage rates based on recent events? The real estate pros have spoken, the majority think (70%) that rates will stay about where they are at or head a little higher. I was most surprised at how quickly the interest rate outlook changed in the last six months. Take a look at the chart below of interest rate predictions at the beginning of the year. It is a total U-turn!
Change in thoughts on interest rates from earlier in the year?
Heading into the year, the biggest outlier was rates in the 6.5% to 7% range with less than 10% selecting this as their option. Fast forward and now 70% of respondents think that rates will either remain in the 6.5%-7% range or will head even higher. At the beginning of the year I didn’t even put as an option rates above 7% which is a huge jump.
Key comment on mortgage rates
I wanted to give a shout out to whomever wrote this comment (survey is anonymous, if you wrote this email me so I can say thank you 😊). This is by far the best explanation of rates I have seen:
As expected, rates stayed high due to uncontrolled deficit spending and lofty costs of living. I always ask people if they had $1mm to invest would they lock it in at 6% for 30 years… everyone says no way. That should say it all. Everyone wants to receive what they are unwilling to personally invest in and that might be an indicator that rates are going to stay high for a long time.
Summary of comments on interest rates
The survey platform we use offers an AI summary of all of the comments. I think the summary pretty accurately captures the sentiment of where we are at in the economy:
The survey responses demonstrate a significant level of concern and uncertainty regarding the current and future state of the economy, particularly in relation to the real estate market, interest rates, and inflation. Many respondents indicated that external factors, such as geopolitical conflicts (specifically relating to Iran) and the actions of the Federal Reserve, play crucial roles in shaping their outlook. Several comments suggest a mix of skepticism and hope about a potential recovery, emphasizing the prolonged challenges around inflation and high-interest rates. There is a general acknowledgment that the current economic situation is intricate, with some respondents expressing doubts about promises for interest rate reductions and the overall affordability of housing and essential goods. The theme of uncertainty is prevalent, with multiple responses reflecting a lack of confidence in predicting future market conditions. Overall, the feedback portrays a community grappling with feelings of apprehension while trying to make sense of an unpredictable economic landscape.
Key insights on Mortgage rates the remainder of the year
Thank you everyone for your participation and insights in my survey. The insight in the comments from readers was amazing and I hope everyone gained a good perspective from your fellow readers. My key takeaway from this survey is that mortgage rates are going to stay higher for much longer than anticipated and very few think they will fall back to pandemic lows as there is a much greater tilt towards higher rates. High rates are going to continue to have huge impacts on residential and commercial real estate with much lower volumes and impacts on prices. Thanks again and stay tuned for upcoming surveys 😊
Additional Reading/Resources:
- https://www.fairviewlending.com/rates-make-a-u-turn-should-you-panic/
- https://www.fairviewlending.com/will-mortgage-rates-fall-in-2026/
- https://www.fairviewlending.com/where-should-you-invest-in-real-estate-in-2026/
- https://www.fairviewlending.com/fed-drops-rates-why-did-mortgage-rates-barely-budge/
- https://www.fairviewlending.com/phantom-debt-soars-what-does-this-mean-for-real-estate-2/
- https://www.fairviewlending.com/never-buy-a-residential-condo/
- https://www.fairviewlending.com/the-war-on-landlords/
- https://www.fairviewlending.com/house-prices-hit-another-record-should-you-even-care/
- https://www.fairviewlending.com/root-cause-of-real-estate-price-declines/
- https://www.fairviewlending.com/will-real-estate-fall-to-2020-values/
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Glen Weinberg personally writes these weekly real estate blogs based on his real estate experience as a lender and property owner. I’m not an armchair reporter/writer. We are an actual private lender, lending our own money. We service our own loans and own commercial and residential real estate throughout the country.
My day job is and continues to be private real estate lending/ hard money lending which enables me to have a unique perspective on the market. I don’t accept any paid sponsorships or ads on my blog to ensure accurate information. I’ve been writing this for almost 20 years and have over 30k subscribers. Please like and share my blogs on linkedin, twitter, facebook, and other social media and forward to your friends 😊. I would greatly appreciate it.
Fairview is a hard money lender specializing in private money loans / non-bank real estate loans in Georgia, Colorado, and Florida. We are recognized in the industry as the leader in hard money lending/ Private Lending with no upfront fees or any other games. We fund our own loans and provide honest answers quickly. Learn more about Hard Money Lending through our free Hard Money Guide. To get started on a loan all we need is our simple one page application (no upfront fees or other games).
Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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