Fannie Mae economists are more conservative than those at the Mortgage Bankers Association (MBA), who this week projected $2 trillion in single-family origination volume for 2025 during the trade group’s annual convention.
With the Federal Reserve expected to continue cutting interest rates — the central bank’s next meeting concludes Oct. 29 — Fannie Mae economists still anticipate mortgage rates will fall to 5.9% in 2026, unchanged from September’s outlook. The group made a slight adjustment to its 2026 origination forecast, lowering it from $2.35 trillion from $2.32 trillion.
Fannie Mae also revised its home sales expectations. It now projects 4.74 million home sales in 2025, up from 4.72 million previously. The 2026 forecast remains unchanged at 5.16 million.
“In our quarterly update to our house price forecast, we now expect home price growth to be 2.5% and 1.3% in 2025 and 2026 on a Q4/Q4 basis, respectively, compared to 2.8% and 1.1% in our prior forecast,” the group wrote.
On the macroeconomic front, the ESR Group raised its outlook for real gross domestic product (GDP) growth. It now expects GDP to increase 1.9% in 2025 and 2.4% in 2026 — up from the prior estimates of 1.5% and 2.1%, respectively.
Inflation expectations were also tweaked. The Consumer Price Index (CPI) is now projected to rise 2.9% year over year in Q4 2025, slightly below the previous forecast of 3.1%. The CPI outlook for 2026 is now 2.7%.