Fannie Mae's economic forecast indicates that mortgage rates will remain volatile in 2025 due to ongoing inflation and trade tensions. The group expects rates to end 2025 at 6.6% and 2026 at 6.5%. The "lock-in effect" may persist, limiting home sales as high rates affect affordability. Home sales are projected to be 22% below 2019 levels, despite an upward adjustment in outlook due to strong December sales. The GDP forecast remains at 2.2% for 2025, with a CPI projection raised to 2.8% amid rising prices and tariffs on Chinese imports.
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