Fannie Mae's Economic and Strategic Research (ESR) Group released its December 2024 commentary, anticipating that housing activity will remain subdued in 2025. This outlook is primarily attributed to persistent affordability challenges and the 'lock-in effect.'
The ESR Group forecasts that existing home sales will only move slightly upward from their recent multi-decade lows. This suggests a continued slow pace for a significant segment of the housing market.
Despite the housing market challenges, the broader economy is expected to remain on solid footing and expand at an above-trend pace through 2026. While this provides a stable backdrop for credit performance, the subdued housing activity could limit Fannie Mae's growth in acquisition volumes.
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