A recent report from Fannie Mae is providing a positive outlook for the housing market during the next couple of years.
Overall home sales are expected to close 2025 at 4.92 million units, revised from a projected 4.86 million in the prior forecast, according to the Fannie Mae Economic and Strategic Research (ESR) Group’s May 2025 Economic and Housing Outlook. Of that 4.92 million, 4.24 million are projected to come from existing single-family home, condo and co-op unit purchases, while 679,000 are expected to come from new single-family home purchases.
Revisions to the home sales forecast were partially driven by the ESR Group’s lower projections for mortgage rates, which it now expects to hit 6.1 percent at the end of 2025 and 5.8 percent at the end of 2026, according to a release from Fannie Mae. In the previous month’s forecast, the mortgage rates were expected to end 2025 at 6.2 percent and 2026 at 6 percent.
The projected 4.92 million units in total home sales by the end of the year is 3.6 percent higher than the 4.75 million units that were sold in 2024, according to the Fannie Mae report. Of those 4.75 million units, 4.06 million were from existing single-family home, condo and co-op unit purchases, and the remaining 686,000 came from single-family sales.
Looking further ahead, total home sales are projected to finish 2026 at about 5.25 million units, up from 5.18 million in the previous forecast. That 5.26 million figure is 6.8 percent higher than the projected number of home sales in 2025.
The average mortgage rate in 2024 varied anywhere from 6.5 percent to 7 percent, and ended the year at 6.7 percent.
Single-family mortgage originations are expected to rise to $1.99 trillion and $2.38 trillion, respectively, for 2025 and 2026, compared to the previous forecast of $1.98 trillion and $2.33 trillion.
Within the $1.99 trillion projected for mortgage originations in 2025, $1.46 trillion is anticipated to come from purchases and the remaining $529 billion is expected to fall into the refinancing category.
Single-family mortgage originations in 2024 were $1.69 trillion, with $1.3 trillion rooted in purchases and $390 trillion in refinances.