Rates Higher for Longer? Dave Meyer’s Take, and What It Means for Buyers Near MTU
On the latest episode of BiggerPockets’ On the Market podcast, host Dave Meyer sits down with Henry Washington, James Dainard and Kathy Fettke to talk about a forecast that caught a lot of people off guard: Fannie Mae has raised its outlook for mortgage rates. The episode, “Fannie Mae Sharply Raises 2027 Mortgage Rate Forecast,” was posted Nov. 3.
The panel walks through the change. Fannie Mae’s earlier forecast had rates around 6.7% through 2027, and Kathy cites coverage putting the new outlook closer to 7.5% by the end of next year. The reason is stubborn inflation: hotter-than-expected consumer and wholesale price reports, plus higher energy, shipping and construction costs. Dave argues this is mostly supply-driven inflation, which the Fed has a harder time fixing with rate moves, and calls it a “long battle.”
Slower sales, not a crash
What stood out to us is that Dave doesn’t see this as a crash story. He expects national home prices to drift a bit lower next year, but says the bigger story is how few homes are changing hands. Pending sales are down roughly 10% from a year ago, and annual existing-home sales are running near 4 million, well below the long-run norm. Buyers are negotiating harder, and stale listings are where the opportunities show up.
Our read for Houghton County
National headlines don’t always match what happens up here. Our market around Houghton, Hancock and MTU has its own rhythm: students and staff coming and going, workers in town on long projects, and visitors who come back every year for snow and fall color. We still have closings on the calendar this fall, and as we’ve said before, there are homes sitting idle in our area while people look for affordable housing.
The advice from the panel fits here too. If you’re buying, run your numbers at a higher rate than today’s to make sure the payment still works. If you’re thinking about a rental, whether a long-term place near campus or a vacation rental for Keweenaw visitors, have more than one exit plan. And look at what’s actually selling in your price range locally, not just the national averages. Higher rates make it harder to get a deal to pencil out, but they also tend to mean less competition for the ones that do.
Listen to the full episode at BiggerPockets: “Fannie Mae Sharply Raises 2027 Mortgage Rate Forecast” on On the Market.
Have questions about buying in the Copper Country, or just coming up for a visit? Message Vern on Facebook about real estate, or book your next Keweenaw vacation direct at vaultventures.co.
Vern Harlock, Realtor® with Northern Michigan Land Brokers