Mortgage rates are expected to stay near 7% in 2027, keeping borrowing costs high despite falling home prices in 2026. Inflation, driven by factors like tariffs and the war in Iran, is pushing rates and homebuilding costs up, reducing affordability. Home prices remain about 59% higher than in 2020 and are projected to rise 2.2% in 2027, creating a "double-whammy" of higher prices and mortgage rates for buyers.