New Forecasts from Fannie and MBA Point to Slow Recovery Through 2026

With inflation slowly easing and mortgage rates still hanging above 6%, real estate professionals have been waiting for updated housing forecasts to shed light on what’s next for the market. Now we have them.

This month, both Fannie Mae and the Mortgage Bankers Association (MBA) released updated economic outlooks for 2025 and beyond. Together, these reports paint a more tempered, but still forward-moving, picture of what lies ahead for home sales, mortgage rates, price growth, and the overall economy.

Here’s what agents need to know.

Mortgage Rate Forecasts: Small Drops, But No Free Fall

For buyers hoping for a big drop in mortgage rates, these forecasts suggest a slow grind rather than a sudden shift. Fannie Mae now expects rates to end 2025 at 6.4%, slightly lower than their previous estimate of 6.5%. 

By the end of 2026, they expect rates to fall further to 6.0%. While it’s a move in the right direction, it’s not enough to significantly change affordability for most buyers.

Fannie Mae:

• End of 2025: 6.4%
• End of 2026: 6.0%

MBA’s forecast doesn’t include projections for the 30-year fixed mortgage rate, but they do expect the 10-year Treasury rate to hold steady at 4.3% through Q4 2027. 

These forecasts reinforce what many agents already know. Mortgage rates aren’t likely to drop below 6% this year, and even in 2026, expectations are cautious at best.

Home Sales: Recovery, But Nothing Wild

Fannie Mae is forecasting a slow and steady return of buyers to the market. With slightly better affordability and more sellers entering the mix, they now project 4.85 million total home sales in 2025, up from 4.82 million. That figure climbs to 5.35 million in 2026, indicating a stronger rebound as rates come down and more homes become available.

MBA didn’t include unit sales data in their July release, but their broader economic projections support the idea of improving market conditions in late 2025 and into 2026.

Fannie Mae’s revised total home sales forecast:

• 2025: 4.85 million (previously 4.82 million)
• 2026: 5.35 million (previously 5.25 million)

It’s a gradual climb, not a spike. But for agents, that still means more listing opportunities and more buyer movement, especially in mid- to lower-priced segments.

Home Prices: Still Rising, Just Not as Fast

If you’re wondering whether home prices will continue climbing, the answer is yes, but more slowly than before. 

Fannie Mae cut its 2025 home price growth forecast from 4.1% to 2.8%. For 2026, it dropped even further, from 2.0% to just 1.1%. These projections reflect both growing inventory and affordability challenges that limit how much more buyers are willing (or able) to pay.

Fannie Mae’s updated home price growth forecast (FNM-HPI, Q4/Q4):

• 2025: 2.8% (previously 4.1%)
• 2026: 1.1% (previously 2.0%)

This isn’t a sign of a price collapse but rather a market that’s finding balance. For agents, it’s a signal that sellers may need to adjust expectations, while buyers should feel less pressure to rush into bidding wars.

Mortgage Originations: A Small Bump in Volume

Thanks to the projected uptick in home sales and modest improvement in rates, Fannie Mae also revised its mortgage origination forecast slightly higher. While refinance volume remains limited, the increase in purchase loans is expected to push total originations to $1.92 trillion in 2025 and $2.34 trillion in 2026.

Updated mortgage origination forecast from Fannie Mae:

• 2025: $1.92 trillion (up from $1.90 trillion)
• 2026: $2.34 trillion (up from $2.28 trillion)

These aren’t dramatic shifts, but they suggest steady growth in demand for financing, especially from buyers entering the market after a long wait.

The Broader Economy: Tepid Growth and Sticky Inflation

Looking beyond housing, both forecasts give us a glimpse at where the overall economy might be headed. Fannie Mae expects GDP growth to land at 1.3% in 2025 and 2.3% in 2026. 

MBA, on the other hand, is more cautious, projecting just 0.5% GDP growth in 2025 and a rebound to 1.5% in 2026.

Inflation continues to be a key factor. Fannie Mae now sees CPI rising 3.0% in 2025, while MBA’s forecast puts it slightly higher at 3.2%. 

By 2026, both expect inflation to moderate closer to the Federal Reserve’s target range.

Key economic forecasts to watch:

• GDP Growth (2025):
  • Fannie Mae: 1.3%
  • MBA: 0.5%
• CPI Inflation (2025):
  • Fannie Mae: 3.0%
  • MBA: 3.2%
• Unemployment (2025):
  • MBA: 4.3%
  • MBA (2026): 4.7%

The takeaway? Slower growth and lingering inflation could keep the housing recovery from accelerating too quickly. But neither forecast suggests a recession or dramatic pullback.

What This Means for Agents

• Rates will likely stay above 6% through 2025, so buyer education remains critical.
• Expect moderate sales growth and slower price appreciation, especially as affordability caps demand.
• Stay consistent with your marketing and outreach, because the recovery will reward agents who play the long game.

The next 18 months won’t be easy, but they also won’t be stagnant. For agents who stay informed and help clients adapt to this evolving market, there’s opportunity in the slow lane.