Fannie Mae's Economic and Strategic Research (ESR) Group released commentary on December 16, 2024, forecasting a subdued housing market in 2025. Existing home sales are expected to move only slightly upward from recent multi-decade lows.
The primary factors contributing to this outlook are persistent affordability challenges and the 'lock-in effect,' where homeowners are reluctant to sell due to low existing mortgage rates. These conditions are expected to keep housing activity constrained.
Despite the housing market headwinds, the broader economy is projected to remain on solid footing, expanding at an above-trend pace through 2026. However, the specific challenges in housing will continue to impact mortgage origination volumes for Fannie Mae.
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