Updated figures suggest a cautious road ahead for homebuyers and sellers alike
Fannie Mae’s Economic and Strategic Research (ESR) Group has lowered its forecast for US existing single-family home sales in 2025 to 4.14 million units, down from the 4.24 million units projected in the previous month’s outlook. The revision was published in the group’s June 2025 Economic and Housing Outlook.
The updated forecast reflects revised expectations for mortgage rates, which are now projected to reach 6.5% by the end of 2025 and 6.1% by the end of 2026. In May, the ESR Group had forecast mortgage rates at 6.1% for 2025 and 5.8% for 2026.
Fannie Mae also lowered its total home sales forecast for 2025, which includes both existing and new single-family homes, to 4.82 million units from the previous estimate of 4.92 million units. In addition, the ESR Group now expects mortgage originations to total $1.90 trillion in 2025 and $2.28 trillion in 2026. These figures are below the May forecast of $1.99 trillion and $2.38 trillion, respectively.
The group revised its projection for real gross domestic product (GDP) growth upward. Real GDP is now forecast to grow 1.4% in 2025 and 2.2% in 2026, measured on a fourth-quarter-over-fourth-quarter basis. These represent increases from the prior forecast of 0.7% for 2025 and 2.0% for 2026.
Inflation expectations were also updated. The Consumer Price Index (CPI) is now forecast to rise 3.2% in 2025, down from the earlier projection of 3.5%. The Core CPI is forecast to increase by 3.3% in 2025, down from 3.8%, and by 2.7% in 2026, up from 2.6%.
The ESR Group, led by chief economist Mark Palim, noted that all figures are based on currently available data and remain subject to change. “Changes in the assumptions or the information underlying these views could produce materially different results,” the group stated.
The full Economic and Housing Outlook for June 2025 is available on Fannie Mae’s site.
What are your thoughts on the latest projections? Share your insights below.
