Rate, Home Price Growth Forecasts Lowered
Fannie Mae now sees slower home price growth and slightly lower mortgage rates through 2026, with modest gains expected in overall home sales.
WASHINGTON — Mortgage rates are expected to end 2025 and 2026 at 6.4% and 6.0%, respectively, downward revisions compared with last month's forecast of 6.5% and 6.1%, according to the July 2025 Economic and Housing Outlook from the Fannie Mae Economic and Strategic Research (ESR) Group.
The ESR Group also updated its home price growth forecast this month and now projects annual home price growth, on a Q4/Q4 basis, of 2.8% in 2025 and 1.1% in 2026. These are downward revisions compared with the previously projected 4.1% and 2.0%. Total home sales are forecast at 4.85 million units in 2025 and 5.35 million units in 2026.
About the ESR Group: Fannie Mae's Economic and Strategic Research Group, led by Chief Economist Mark Palim, studies current data, analyzes historical and emerging trends, and conducts surveys of consumers and mortgage lenders to inform forecasts and analyses on the economy, housing, and mortgage markets.
Source: Fannie Mae
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