The Mortgage Bankers Association, in its latest economic forecast, is more pessimistic about the trend for interest rates and the housing market in general.
The group's analysts said the economy has lots of forward momentum that will lead Federal Reserve officials to keep boosting rates this year in an effort to head off inflation. By next year, they said, fixed-rate mortgages will reach 9.15%, 10-year Treasury rates will hit 7.75%, and one-year adjustable rates will be more than 6%.
Sales of existing homes and housing starts should manage to climb higher this year but will weaken in 1995 along with lending activity, the bankers said.
