Fannie Mae revised its 2025 forecast for existing-home sales, reducing estimated growth from 11% to 4% due to higher-than-expected mortgage rates.
Mark Palim, Fannie Mae's chief economist, stated that higher mortgage rates are likely to strengthen the ongoing lock-in effect, keeping sales subdued.
Fannie Mae believes that elevated mortgage rates will discourage homeowners with favorable rates from selling, maintaining low inventory and affecting sales.
Despite bearish expectations, the October report indicated that existing-home sales may have reached a bottom, with a year-over-year increase of 2.9%.
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