Fannie Mae Reports Mortgage Rates Stall 2025 Home Sales Forecast

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Fannie Mae Reports Mortgage

Existing home sales in the U.S. are expected to remain near historic lows through 2025, according to the latest forecast from Fannie Mae’s Economic and Strategic Research Group. The revised outlook now projects a modest 4% increase in sales next year, down from earlier predictions of an 11% rise. This is due to a sharp uptick in mortgage rates, which are now expected to end 2025 at 6.3%, remaining above 6% through 2026.

The rise in rates has led to a slowdown in housing activity, with fewer homeowners willing to sell due to the “lock-in effect”—the reluctance to give up lower mortgage rates. However, Fannie Mae anticipates a stronger rebound in 2026, with a 17% jump in existing home sales, driven by improving affordability and pent-up demand. Fannie Mae has highlighted this rebound as a critical factor in easing the housing market’s ongoing challenges.

Meanwhile, new home sales are expected to continue growing, as homebuilders offer incentives to attract buyers. Despite higher mortgage rates, the forecast for economic growth remains stable, with core inflation expected to stay elevated until 2026, when it is projected to return to the Fed’s 2% target. Fannie Mae’s projections emphasize the resilience of new home sales even in a challenging rate environment.

Mark Palim, Fannie Mae’s Chief Economist, noted that while affordability remains a key challenge, the strong economy and job market could eventually help lift housing demand. According to Fannie Mae, this demand will play a crucial role in stabilizing the housing market by 2026.

Fannie Mae’s research underscores the importance of balancing economic growth with policies to enhance housing affordability. In its latest report, Fannie Mae has also explored strategies to mitigate the lock-in effect, which has dampened existing home sales. The organization continues to be a leading voice in providing insights into the interplay between mortgage rates and housing activity.

As Fannie Mae closely monitors market trends, it anticipates that homebuilders’ innovative approaches and incentives could offset some challenges posed by high rates. Fannie Mae’s insights also point to potential shifts in buyer behavior, which may drive the market’s recovery.

Fannie Mae remains committed to helping policymakers and industry stakeholders address the persistent challenges in the housing market. Through its Economic and Strategic Research Group, Fannie Mae delivers critical analysis to inform housing-related decision-making.

Source: Link

A new bipartisan caucus in the House of Representatives aims to tackle America’s housing crisis. The “Yes, In My Backyard” or YIMBY caucus is pushing for major changes to housing regulations. The group, which includes 25 members from both parties, advocates for reducing zoning restrictions, cutting permit delays, and increasing funding for affordable housing.

The YIMBY movement, which started in San Francisco, calls for more apartment buildings and student housing in residential areas, arguing that local bans and long approval processes are exacerbating the housing shortage.

But critics, argue that large-scale apartment development could lower property values in surrounding neighborhoods. Housing experts like Kirk McClure point out that the real issue is the affordability of available housing, not the number of units.

As mortgage rates hit 23-year highs and rent prices remain elevated, the YIMBY caucus has introduced seven bills to Congress, with support from both liberal and conservative lawmakers. The goal? To deregulate housing markets and make homeownership more accessible for Americans.

Source: Link

Big cities are taking action against algorithm-based rent pricing, as a federal lawsuit against rental-software firm RealPage could take years to resolve. In recent months, San Francisco and Philadelphia passed laws limiting the use of algorithmic systems to set rents, with other cities like San Diego and New Jersey considering similar measures.

This push comes after the U.S. Justice Department and eight state attorneys general accused RealPage of illegally coordinating rent prices across three million apartments, using confidential data to inflate rents in violation of antitrust laws. RealPage denies the claims, but has already agreed to let landlords opt out of using nonpublic data in its software.

The growing regulation effort is driven by concerns over skyrocketing housing costs, with progressive lawmakers pushing to rein in tech-driven rent hikes. “Algorithms are already here,” said Philadelphia Councilman Nicolas O’Rourke, who sponsored the city’s new ban.

While the legal battle continues, cities across the country are targeting the growing influence of tech in the rental market, hoping to curb rising rents and give tenants more power in the process.

Source: Link

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