MBA Forecasts 2027 Fed Rate Hike, Pressuring Mortgage Origination Growth

The Mortgage Bankers Association expects the Federal Reserve could maintain a restrictive stance if inflation remains above its policy target. Federal interest rates affect mortgage funding costs and housing affordability, while expectations of higher rates could also curb banks' willingness to lend and slow housing-market activity.

In its latest revised forecast, the MBA expects U.S. mortgage originations to grow 6% in 2026 but says the Fed could raise interest rates in 2027. Economic volatility stemming from geopolitical developments, together with the risks of higher inflation and borrowing costs, could weigh on subsequent origination growth.