Economists with Fannie Mae are painting a slightly rosier picture of what they see the overall economy looking like through the end of this year and into 2026.
In a pair of newly released forecasts, the mortgage giant provided its expectations for where home sales, mortgage rates, inflation and the broader economy will head moving forward.
“Our total home sales outlook for 2025 was revised to 4.74 million, up from 4.72 million previously,” Fannie wrote in its forecast. “Our 2026 home sales projection is 5.16 million, unchanged from prior forecast.”
Economists at the mortgage giant are predicting sales of existing homes will grow by 9.6 percent next year, to 4.45 million, with new home sales also growing by 4.7 percent, to 704,000.
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Fannie expects mortgage rates to hover around 6.3 percent by the end of this year. By the end of next year, Fannie expects mortgage rates to sit around 5.9 percent.
That was the second forecast this week to project that mortgage rates would remain stubborn, despite anticipated cuts to the federal funds rate through the end of this year.
Earlier this week, economists with the Mortgage Bankers Association (MBA) said that they expect rates on 30-year fixed-rate mortgages to average 6.4 percent all next year before dipping to 6.2 percent by Q2 2027.
Fannie economists also said they expect home prices to rise 1.3 percent next year.
As for the broader economy, Fannie Mae economists said they expect gross domestic product (GDP) growth to end higher than expected by the end of this year. They forecast GDP growth will end at 1.9 percent by the end of this year, up from their prior forecast of 1.5 percent.
Next year, the economists anticipate GDP growth to end at 2.3 percent, up from a previous forecast of 2.1 percent, they wrote.
Fannie Mae forecasters said they expect the Consumer Price Index to end this year at 2.9 percent. That’s lower than the 3.1 percent growth they previously forecast.
They expect CPI to fall slightly next year, to 2.7 percent, but that’s up slightly from the previous forecast of 2.6 percent.
Editor’s note: This story was updated to clarify existing-home sales and total home sales.
