Fannie Mae: Rates likely to remain elevated longer than expected
Mortgage rates could remain near 6.3% through much of 2026, a forecast that could continue shaping affordability, inventory and buyer demand. Local market conditions and negotiating trends remain critical as inventory slowly improves.
Higher mortgage rates are expected to stick around longer than previously forecast, a development that could continue shaping buyer demand, affordability and inventory trends across housing markets in Florida and around the country.
In its May 2026 Economic and Housing Outlook, Fannie Mae said it now expects the average 30-year fixed mortgage rate to remain near 6.3% through much of 2026, a slightly higher path than earlier projections.
Fannie Mae also lowered its outlook for home sales growth, saying higher borrowing costs continue to limit affordability and keep many homeowners locked into lower mortgage rates obtained during the pandemic-era housing boom.
Still, the organization expects existing-home sales to increase modestly in 2026 as inventory improves and more buyers gradually reenter the market.
National home-price growth is also expected to continue slowing rather than reversing. Fannie Mae forecasts home prices will rise about 4.1% in 2025 and 3.2% in 2026.
Realtor® John Slivon, of LAER Realty Partners, Port St. Lucie, said agents are watching local conditions closely because national trends do not always reflect what is happening in individual markets.
“We’re hyper-focused on our local activity,” Slivon said.
He said higher mortgage rates continue to make affordability an important part of buyer decision-making. Conversely, Slivon said many homeowners remain reluctant to sell because they are locked into lower mortgage rates from previous years. That continues to limit the amount of existing-home inventory entering the market.
Inventory changes are giving some buyers more room to compare options and, for homes listed for sale, may help them find a seller more motivated to negotiate.
“Those buying may find they are stronger in their negotiating positions and will be getting concessions,” Slivon said.
For sellers, that means pricing, preparation and flexibility remain important, especially as buyers weigh monthly payments more carefully.
Fannie Mae said growing inventory in many markets could help create more negotiating opportunities for buyers after years of unusually tight supply conditions. At the same time, affordability remains one of the biggest challenges facing the housing market nationally.
Fannie Mae also expects refinance activity to improve somewhat over the next year, though not as much as previously forecast, because mortgage rates are now expected to remain elevated longer than anticipated.
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