The Pace of Existing Home Sales To Remain Slow

A report released today by Fannie Mae’s Economic and Strategic Research Group projects existing home sales will stay near historic lows through 2025. After a sharp rise in mortgage rates, sales for next year are expected to grow by only 4%, with rates forecasted to remain above 6% until at least 2026.

However, there’s hope on the horizon. By 2026, existing home sales are anticipated to rise 17% as affordability improves and pent-up demand emerges. New home sales are expected to remain strong as builders continue offering buyer incentives.

On the economic front, the U.S. economy remains steady, with GDP growth forecasted near 2.2% in 2026. Core inflation remains sticky but is expected to hit the Federal Reserve’s 2% target by mid-2026. Despite these challenges, Fannie Mae economists are cautiously optimistic, citing potential labor market resilience and eventual improvements in affordability.