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


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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

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