The housing market has an affordability problem. The cost of buying a house has skyrocketed over the past several years. During the pandemic, a shortage of houses collided with a surge in buyer demand and drove prices higher. Then, mortgage rates began to increase early in 2022. Now, the combination of higher prices and elevated rates has caused the market to slow from its previously frenetic pace. But, according to a new commentary from Fannie Mae’s Economic and Strategic Research Group, that may be good for home buyers. The group releases a monthly forecast detailing where they see the economy and housing marketing heading from here. According to their most recent release, they’ve revised their forecast and see prices and rates moderating over the next year and a half. The group predicts home price growth of 2.8 percent this year, and just 1.1 percent in 2026. They also believe mortgage rates will begin to fall by the end of the year and move even lower next year. In other words, home buyers may soon see some relief, which is likely why Fannie Mae also revised their home sales forecast. They now expect more sales this year and further improvement in 2026. (source)
