Mortgage rates could climb another 1.5 percentage points, according to a leading economist.
National Association of Realtors chief economist Lawrence Yun predicted that interest rates could be on their way to 8.5 percent if they pass a threshold of 7 percent, according to Bloomberg. Yun based his forecast on key levels of resistance borrowing costs will face after a key inflation indicator hit a 40-year high.
After creeping toward 6 percent in recent months, the average rate for a 30-year fixed mortgage this week was just over 6.9 percent — a 20-year high — when Yun presented his findings at the National Association of Real Estate Investors in Atlanta.
“Today’s inflation rate report is going to test that 7 percent level,” Yun said in the presentation. “Once it’s broken, the next level of resistance is 8.5 percent, which would be another big shock to the housing market.”