HousingWireHousingWire
Mortgage rates are expected to end 2025 at 6.4% and 2026 at 6% — downward revisions compared with last month’s forecast figures of 6.5% and 6.1%. That’s according to the July 2025 Economic and Housing Outlook released Thursday by Fannie Mae‘s Economic and Strategic Research (ESR) Group.
The ESR Group also updated its home-price growth forecast and now projects annual price appreciation of 2.8% in 2025 and 1.1% in 2026. These are also downward revisions compared with the previously projected figures of 4.1% and 2%.
Home sales are forecast at 4.85 million units in 2025 and 5.35 million units in 2026 — each of which represent upward revisions from June.
The ESR Group revised its real gross domestic product (GDP) growth outlook for 2025 and 2026 to 1.3% and 2.3%, respectively, down from estimates of 1.4% and 2.2% in its prior forecast.
It also expects the Consumer Price Index (CPI) to rise 3% year over year in 2025, down from 3.2% in its June forecast. The outlook for 2026 is 2.7%, down from 2.8% previously. Core CPI — which excludes volatile goods like food and energy — is expected to rise 3.2% this year (down from 3.3% previously) and 2.7% in 2026 (unchanged from the prior forecast).
Lastly, the group now projects mortgage origination volume to rise to $1.92 trillion and $2.34 trillion, respectively, in 2025 and 2026. The previously estimated figures were $1.9 trillion and $2.28 trillion.
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