Fannie Mae has released its latest housing and economic forecast, and the takeaway is clear: the housing market is expected to gradually regain momentum in 2026, supported by easing mortgage rates, improving affordability, and a steadier economic backdrop.
According to the forecast, mortgage rates are expected to trend lower over the next year and settle closer to the 6% range. While rates aren’t projected to return to the historic lows seen earlier in the decade, even modest declines are expected to bring more buyers and homeowners off the sidelines. That shift alone could unlock meaningful activity in both purchases and refinances.
Home sales are forecast to increase in 2026 and continue rising into 2027, with existing home sales seeing some of the strongest gains. This suggests the long-running “lock-in effect,” where homeowners held onto ultra-low mortgage rates and avoided moving, is beginning to loosen as rate pressure eases and life events take priority over timing the market.
Home price growth is expected to remain positive but subdued. Rather than sharp increases or major corrections, Fannie Mae projects steady, sustainable appreciation, signaling a housing market that’s stabilizing instead of overheating.
On the economic side, the forecast calls for continued GDP growth, moderating inflation, and a relatively stable labor market. That combination supports housing demand without introducing the volatility that defined much of the past few years.
Bottom line: Fannie Mae’s latest forecast points to a housing market that’s slowly thawing, not surging or stalling. For buyers, sellers, and homeowners alike, 2026 looks less about perfect timing and more about renewed opportunity as conditions normalize. At CapCenter, we help clients take advantage of those opportunities with ZERO Closing Cost mortgages, competitive rates, and an in-house team that makes the process clear, efficient, and built around real savings.
