According to National Association of Realtors Chief Economist Lawrence Yun, mortgage rates will rise to 5% next year and to 6% in two years. But this does not mean that mortgage rates will put the brakes on home sales, as long as lenders loosen their standards.

Per the Dallas Morning News:  

“In a rising interest rate environment, if we can open up the credit box the housing market momentum can continue,” he told thousands of real estate agents meeting last week in New Orleans. “That can provide potentially a 15% boost to home sales.”

“Lenders can dial down their underwriting standards modestly.”

In his speech at the NAR Conference & Expo, Federal Housing Finance Agency Director Mel Watt emphasized to Realtors that now is a great time for real estate agents to be actively encouraging their customers to become homeowners.

And this is just a couple weeks after Watt and U.S. Secretary of Housing and Urban Development Julian Castro spoke at the Mortgage Bankers Association Annual Convention & Expo where they outlined changes that would reduce confusion and risks for lenders, including clarifying the Representations and Warranty Framework to help reduce repurchases.