Homebuyers waiting on a return to lower mortgage rates before buying are probably out of luck, a top housing economist told local homebuilders and Realtors Tuesday.
Lawrence Yun, the chief economist for the National Association of Realtors, said home borrowing rates are headed higher as the Federal Reserve Bank tightens its monetary policy, inflation edges higher and government deficits worsen.
“Some consumers may be thinking that because mortgage rates are higher than they were a year ago, maybe I should just wait until rates fall down again,” Yun said during a luncheon speech to the Greater Chattanooga Realtors and the Home Builders Association of Chattanooga. “Well, they will be waiting forever.”
The top economist for America’s biggest real estate association said he expects 30-year mortgage rates will likely rise to about 5 percent, up from the current rate of 4.75 percent, over the next 12 months.
That’s still only a fraction of the 14 percent mortgage rates of the 1970s when the Fed tightened to help control double-digit inflation rates. But it could make housing affordability even more challenging for many would-be buyers.