Mortgage Rate and Home Price Growth Forecasts Revised Lower

WASHINGTON, July 24, 2025 /PRNewswire/ -- Mortgage rates are expected to end 2025 and 2026 at 6.4 percent and 6.0 percent, respectively, downward revisions compared with last month's forecast of 6.5 percent and 6.1 percent, according to the July 2025 Economic and Housing Outlook from the Fannie Mae (OTCQB: FNMA) 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 percent in 2025 and 1.1 percent in 2026. These are downward revisions compared with the previously projected 4.1 percent and 2.0 percent. Total home sales are forecast at 4.85 million units in 2025 and 5.35 million units in 2026.

Visit Fannie Mae's Data and Insights page to read the full July 2025 Economic and Housing Outlook, including the Economic Developments Commentary, Economic Forecast, and Housing Forecast. To receive email updates with other housing market research from Fannie Mae's Economic and Strategic Research Group, please click here.

Opinions, analyses, estimates, forecasts, beliefs, and other views of Fannie Mae's Economic and Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, beliefs, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, beliefs, and other views published by the ESR Group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.

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.

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