The Wall Street Journal

The era of ultralow mortgage rates in the U.S. is unlikely to return anytime soon, even as the Fed cuts rates.

Mortgage rates have roughly doubled to above 6% since the central bank started its inflation fight in 2022. Economists expect them to move only slightly lower over the next year, which would do little to ease an affordability crisis that has put homeownership out of reach for many Americans.

The mortgage market has already priced in expectations for the Fed to cut rates this year and next, so "any further decline in mortgage rates will be minimal," said Lawrence Yun, chief economist at the National Association of REALTORS®, in a statement.

Average mortgage rates have already fallen to their lowest level in more than a year. For buyers with a budget of $2,000 for a monthly mortgage payment, their purchasing power has climbed by $50,000 compared to the spring, Yun said.

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