Fannie Mae Economists Predict Slow Housing Market in 2025

A December report forecasts a continued “lock-in effect” due to high mortgage rates and a low production of multifamily housing.

1 minute read

December 18, 2024, 8:00 AM PST

By Diana Ionescu @aworkoffiction


View of top of high-rise apartment building under construction with red and white cranes

Jonathan Stutz / Adobe Stock

A press release from Fannie Mae predicts that the “lock-in effect” in the housing market will continue into 2025, “with existing home sales forecast to move only slightly upward from recent multi-decade lows, according to the December 2024 commentary from the Fannie Mae (FNMA/OTCQB) Economic and Strategic Research (ESR) Group.”

Fannie Mae economists had five key predictions for the upcoming year: average mortgage rates will decline, but remain above 6 percent; existing home sales will remain low; new home sales will offer some options to prospective homebuyers — “where they can be built;” home price growth will slow; and multifamily housing “will remain in a holding pattern,” unwelcome news for households seeking smaller, more affordable housing types.

“While we think conditions on a national basis will remain challenging, we’re seeing meaningful regional differences in market conditions, and the homebuying experience — as the adage goes — will continue to be a local one,” said Mark Palim, Fannie Mae Senior Vice President and Chief Economist.

Monday, December 16, 2024 in Fannie Mae Foundation

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

June 11, 2025 - Diana Ionescu

Metrorail train pulling into newly opened subterranean station in Washington, D.C. with crowd on platform taking photos.

Congressman Proposes Bill to Rename DC Metro “Trump Train”

The Make Autorail Great Again Act would withhold federal funding to the system until the Washington Metropolitan Area Transit Authority (WMATA), rebrands as the Washington Metropolitan Authority for Greater Access (WMAGA).

June 2, 2025 - The Hill

Large crowd on street in San Francisco, California during Oktoberfest festival.

The Simple Legislative Tool Transforming Vacant Downtowns

In California, Michigan and Georgia, an easy win is bringing dollars — and delight — back to city centers.

June 2, 2025 - Robbie Silver

Color-coded map of labor & delivery departments and losses in United States.

The States Losing Rural Delivery Rooms at an Alarming Pace

In some states, as few as 9% of rural hospitals still deliver babies. As a result, rising pre-term births, no adequate pre-term care and "harrowing" close calls are a growing reality.

6 hours ago - Maine Morning Star

Street scene in Kathmandu, Nepal with yellow minibuses and other traffic.

The Small South Asian Republic Going all in on EVs

Thanks to one simple policy change less than five years ago, 65% of new cars in this Himalayan country are now electric.

June 15 - Fast Company

Bike lane in Washington D.C. protected by low concrete barriers.

DC Backpedals on Bike Lane Protection, Swaps Barriers for Paint

Citing aesthetic concerns, the city is removing the concrete barriers and flexposts that once separated Arizona Avenue cyclists from motor vehicles.

June 15 - The Washington Post