The Mortgage Lab · July 2026 — BofA Flips to Three Hikes

Volume 9 · July 1st, 2026

Every week, investors and homeowners ask us the same question: where are rates going? Our honest answer is still — nobody knows. But the conversation just shifted, and it deserves your attention.

On June 22nd, Bank of America reversed its 2026 forecast and called for three Federal Reserve rate hikes through year-end — not cuts. Deutsche Bank followed with a similar call. The Mortgage Bankers Association’s chief economist agrees mortgage rates aren’t likely to drop anytime soon. And 9 of 18 FOMC members signaled at the June meeting that they expect at least one hike in 2026.

We’re not predicting the future. We’re telling you what changed. The “wait for rates to drop” strategy that’s dominated headlines for two years just lost some of its biggest defenders — and if you’ve been sitting on that strategy, it deserves a fresh look. This issue is about what to actually do about it.

Market Update — What’s Actually Happening With Rates

The Federal Reserve held its benchmark rate steady at 3.50%–3.75% at its June 17th meeting — the fourth consecutive hold, and the first meeting under new Chairman Kevin Warsh. But the meeting itself was notably hawkish. Warsh referenced “price stability” roughly a dozen times in his press conference. And nine of eighteen FOMC members signaled they expect at least one rate hike before year-end.

Then on June 22nd, Bank of America’s economics team reversed its previous forecast — flipping from “Fed will hold” to calling for three 25-basis-point rate hikes in September, October, and December. That would take the Fed funds rate from today’s 3.50%–3.75% range up to 4.25%–4.50%. Deutsche Bank issued a similar (slightly less aggressive) call days earlier, projecting two hikes by year-end.

The driver: inflation that BofA economist Aditya Bhave describes as “unambiguously worse.” Core PCE — the Fed’s preferred inflation gauge — is expected to print at 3.5% annually, well above the Fed’s 2% target. Iran conflict-driven energy prices, tariff effects, and a labor market that has firmed up year-to-date have eliminated most of the case for cuts.

The 30-year fixed mortgage currently sits near 6.5% — and per Mortgage Bankers Association chief economist Mike Fratantoni, “MBA continues to anticipate that the Fed’s next move will be a rate hike, and that means mortgage rates are unlikely to drop anytime soon.”

• 6.79% — National avg. 30-yr refinance APR (Bankrate, June 23, 2026)
• 75 bps — Total Fed hikes BofA now forecasts by year-end (BofA / A. Bhave, June 22)
• 9 of 18 — FOMC members signaling a 2026 rate hike (FOMC dot plot, June 17)

What Could Change This

BofA could be wrong. Warsh could pivot. The Iran ceasefire could hold and energy prices could ease. If labor data softens significantly or inflation cools faster than expected, the hike scenario weakens. But for now, market pricing has moved — and the largest banks on Wall Street are positioned for higher rates, not lower.

IPL Takeaway

The consensus that anchored two years of “wait for rates” strategy is fracturing — and the asymmetry of the bet just changed. If rates fall later, you can refinance again. If rates rise as BofA, Deutsche Bank, and the MBA now expect, the window you’ve been waiting for may be closing instead of opening. Compare what you have today to what’s available today. The numbers tell the truth. Predictions don’t.

For Real Estate Investors: The Refi Math Most Investors Are Getting Wrong

A lot of investor portfolios assembled in 2023 and 2024 are sitting on debt that no longer makes sense. DSCR loans closed at 7.75%+. Hard money and bridge loans pushing 10–12%. Seller-financed notes with balloon payments coming due. The “wait for rates to drop” advice has been costing those investors money every month for the past year.

Here’s the honest framework we walk every portfolio investor through:

• Sitting at 7.5% or higher? Refinance now. Today’s DSCR pricing already delivers meaningful savings. Waiting for a Fed cut means donating money to your existing lender for months — and with BofA and Deutsche Bank now calling for hikes instead, you may be waiting for a rate drop that doesn’t come.
• Sitting at 6.5%–7.0%? Run the numbers carefully. The case to wait has weakened. With Wall Street’s biggest banks now leaning toward hikes rather than cuts, locking in today’s pricing — or at minimum putting a rate-shopping plan in place — protects you regardless of which direction rates move next.
• On a bridge loan, hard money, or seller-financed note? The clock is the issue, not the rate. Balloon payments and expiring bridges have hard deadlines — refinancing into long-term DSCR debt removes that pressure entirely, regardless of where rates sit. And if hikes do materialize, the cost of waiting goes up fast.

The strategic insight: your refi decision isn’t about predicting the future. It’s about whether your current debt structure can survive what the future might throw at it. Bridge expirations don’t care about Fed announcements. Balloon payments don’t care about Treasury yields. Get the structure right, and rate movement becomes upside instead of risk.

“I had a portfolio that grew faster than my financing strategy. Two bridge loans coming due, three seller-financed notes with balloons inside 18 months, and four DSCR loans I closed in 2023 at 7.75% or higher. IPL walked me through a full portfolio refi — we consolidated everything into long-term DSCR at a 6.65% blended rate, pulled $185K in cash for the next two acquisitions, and cut my monthly nut by about $2,400. The thing that made it work wasn’t the rate alone. It was that they showed me exactly what I had versus exactly what was available — no projections, just numbers I could verify.”

— James K. · Portfolio investor, 9 doors across NC & SC

For Homeowners & First-Time Buyers: The Wait-or-Act Question — Run the Math Both Ways

If you’re sitting on a primary residence with a rate above 7%, or you’re a first-time buyer asking yourself whether to pull the trigger now or wait for “better” conditions, this section is for you.

The honest truth: there’s no universally right answer. But there is a right way to think about it — and most people are doing the math on only one of three possible futures.

The three scenarios you should be modeling:

• Scenario A — Rates rise. Now the headline call from BofA and Deutsche Bank. Higher rates = higher monthly payments on potentially flatter prices. Waiting locks in worse, not better — and accelerates as hikes compound.
• Scenario B — Status quo continues. Rates and prices both move sideways through year-end. Every month of waiting is a month of rent paid (or interest paid on existing debt) with no benefit gained.
• Scenario C — Rates drop. Increasingly contrarian. Lower payment but on a likely larger loan — prices typically rise as rates fall, and you’d compete with a flood of returning buyers.

The right move depends on your timeline, your risk tolerance, and your current housing cost. But “waiting” is not a free option — it has a real monthly cost. And as of last week, Wall Street’s biggest banks are now leaning toward the scenario where waiting hurts the most.

A Note for Self-Employed Borrowers

If you’re self-employed, a 1099 contractor, or your tax returns don’t reflect your true income because of write-offs, traditional conventional financing can feel impossible. We have great options for primary residences too — Bank Statement loans (qualify off 12–24 months of deposits) and P&L loans (qualify off a CPA-prepared profit and loss statement). No tax returns required. Details below.

Loan Programs Built for This Market

For Investors — DSCR Loans: Refinance Your Portfolio. Lock in Cash Flow.

Qualify based on the property’s rental income, not your personal tax returns. Perfect for refinancing high-rate DSCR loans, exiting bridge or hard money, paying off seller-financed notes, or pulling cash-out to fund your next acquisition. We’re closing portfolio refis in 21–30 days.

• Loan Amounts: $75K – $3M+
• LTV: Up to 80% (75% cash-out)
• DSCR Ratio: Down to 0.75 (No-Ratio available)
• Term: 30-yr fixed & ARMs
• Credit: 660+ minimum
• Property Types: SFR, 2–4 unit, condo, STR

For Homeowners & Self-Employed Buyers — Bank Statement & P&L Loans for Your Primary Residence

For self-employed borrowers, business owners, and 1099 contractors whose tax returns don’t reflect their true income, conventional financing leaves money on the table. Qualify off your bank deposits or a CPA-prepared P&L instead. Available for primary residences, second homes, and investment properties.

• Loan Amounts: $150K – $3M+
• LTV: Up to 90% (primary)
• Income Docs: 12–24 mo. bank statements or P&L
• Tax Returns: Not required
• Credit: 660+ minimum
• Property Types: Primary, 2nd home, investment

We also offer full conventional financing, jumbo loans, Fix & Flip, Bridge, and HELOC products. Whatever your scenario, there’s almost certainly a path forward — and we’ll tell you honestly if there isn’t.

Compare What You Have to What’s Available Today

Predictions are flying in every direction. Here’s what we can do for you that doesn’t require any of them: run the math on your current loan versus what’s available right now. No commitment, no pressure — just real numbers. With BofA, Deutsche Bank, and the MBA now positioned for hikes, the question worth answering is whether you want to find out where you stand now, or after the Fed’s next move.

Contact us or reach your loan advisor directly:
Justin Landesman · (818) 625-3721 · justin@investorpropertyloan.com

Stay curious. Stay informed. Stay funded.
The Investor Property Loan Team · Your Mortgage Lab
(800) 440-8350 · InvestorPropertyLoan.com