Economic forecasting, especially for the housing market, has become more challenging due to COVID-19 lockdowns and unprecedented government measures. Mortgage rates ended last year higher than expected for the third consecutive year, leading to uncertainty in future forecasts. Currently, forecasters anticipate a steady decline in mortgage rates over the next 18 months, with rates expected to fall to around 6.5%-6.6% by the end of 2025. However, despite this decline, housing affordability may still face significant challenges during this period.
Economic forecasting, particularly for the housing market, remains complex in light of COVID-19 impacts and significant government intervention, compounded by fluctuating interest rates.
Despite estimates from Fannie Mae and others that mortgage rates will decrease, housing affordability will likely remain an issue for buyers in 2025 and 2026.
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