Fannie Mae Forecasts Strong Housing Market Recovery and Increased Mortgage Activity by 2026
- Fannie Mae forecasts an increase in home sales to 4.72 million in 2025, rising to 5.16 million in 2026.
- Projected single-family mortgage originations will grow from $1.85 trillion in 2025 to $2.32 trillion in 2026.
- Fannie Mae emphasizes that forecasts depend on economic assumptions and are not guaranteed outcomes.
Fannie Mae Projects Positive Trends in Housing Market for 2025 and Beyond
As Fannie Mae releases its September 2025 Economic and Housing Outlook, the mortgage industry's trajectory appears promising, with expectations for a notable increase in home sales and mortgage originations. The report forecasts that mortgage rates will conclude 2025 at 6.4%, decreasing further to 5.9% in 2026. This anticipated decline is expected to stimulate both new and existing home sales, with projections of 4.72 million sales in 2025 rising to 5.16 million in 2026. Such trends suggest a robust recovery in the housing sector, bolstered by favorable financial conditions that could significantly benefit prospective homebuyers.
The Economic and Strategic Research (ESR) Group at Fannie Mae, under the guidance of Chief Economist Mark Palim, uses a comprehensive approach to analyze the housing market. By integrating current data, historical trends, and feedback from consumers and lenders, the group crafts informed forecasts that reflect the evolving landscape of mortgage lending. The projected increase in single-family mortgage originations—from $1.85 trillion in 2025 to $2.32 trillion in 2026—signals an uptick in borrowing activity, driven by a growing refinance share that is expected to rise from 26% in 2025 to 35% in 2026 as lower rates come into play.
However, Fannie Mae advises that these forecasts are not absolute guarantees of future outcomes. The predictions are contingent on various economic assumptions, which, if altered, could lead to significantly different results. The organization underscores the importance of staying informed through its resources, including its Data and Insights page and email updates on housing market research, as these tools will help stakeholders navigate the evolving conditions in the housing market.
In addition to the optimistic housing market outlook, the broader economic context is shaped by fluctuating mortgage rates, which play a critical role in influencing buyer behavior and market dynamics. As potential buyers begin to respond to the anticipated drop in rates, the increased activity in the housing sector could stimulate related industries, including construction and home improvement. This interconnectedness highlights the critical role that mortgage rates and housing sales play in the overall economic landscape, suggesting that stakeholders across various sectors should remain vigilant and adaptable in response to these developments.