The May 2025 Housing Forecast from Fannie Mae is here, and it’s packed with insights for both home buyers and sellers. Whether you’re planning to buy, sell, or just want to keep up with the market, the latest Fannie Mae projections highlight the trends that will shape real estate in the coming months.
Let’s break down what Fannie Mae’s experts predict for home sales, prices, mortgage rates, and what these trends mean for buyers and sellers today.
| May 2025 Housing Forecast (Fannie Mae) | |
|---|---|
| Total Home Sales | 2024: 4.75M → 2025: 4.92M → 2026: 5.25M |
| Home Price Growth (HPI) | 2024: +5.3% → 2025: +4.1% → 2026: +2.0% |
| 30-Year Mortgage Rate | 2024: 6.7% → 2025: 6.4% → 2026: 5.9% |
| New Construction Starts | Single-family stable, multifamily rising |
| Refinance Share | 2024: 23% → 2025: 27% → 2026: 33% |
| What It Means |
|
Home Sales Are Rising
Good news for buyers and sellers: Total home sales are expected to increase over the next two years. According to Fannie Mae, we’ll see
- 2024: 4.75 million home sales
- 2025: 4.92 million
- 2026: 5.25 million
What this means:
- Sellers: Buyer demand is expected to grow, potentially supporting strong home values and faster sales.
- Buyers: With more homes hitting the market, you’ll likely have more options, but competition could remain healthy as demand rises.
Home Price Growth Is Slowing
While prices are still on the rise, the pace is expected to cool off:
- 2024: +5.3%
- 2025: +4.1%
- 2026: +2.0%
Key Takeaways from the May 2025 Housing Forecast, Fannie Mae:
- Sellers: Gone are the days of double-digit price jumps. Pricing competitively and preparing your home properly are more important than ever.
- Buyers: Homes are still appreciating, but you may have more negotiating power and less pressure to rush than in recent years.
Mortgage Rates Are Trending Down
One of the most closely watched factors: mortgage rates! Fannie Mae projects the average 30-year fixed rate will gradually fall:
- 2024: 6.7%
- 2025: 6.4%
- 2026: 5.9%
Why it matters:
- Sellers: Lower rates can bring more buyers into the market, supporting demand for your home.
- Buyers: As rates ease, affordability improves. If you buy now at a higher rate, refinancing in the next 1–2 years may be an option.
New Construction: A Mixed Picture
- Single-family homes: Starts are forecast to be steady—not a big jump in new houses, but inventory should remain stable.
- Multifamily (condos/apartments): Growth is expected, with more options on the way.
For you:
- Sellers: You won’t be facing a flood of new single-family competition, but expect more multifamily options in some areas.
- Buyers: Looking for a condo or townhouse? The choices could be expanding.
Refinance Opportunities Are Coming
As rates fall, Fannie Mae predicts more homeowners will choose to refinance. The refinance share of mortgage originations could jump to 33% by 2026 (up from 23% in 2024).
- Sellers: Some owners may choose to refinance instead of moving, which could impact available inventory.
- Buyers: If you purchase at today’s rates, keep an eye on future opportunities to refinance and save.
What Does This Mean for You?
For Sellers:
- Demand is picking up—homes may sell faster, but price growth is slower. Focus on pricing and presentation.
- With more buyers returning to the market, now is a smart time to prepare your home for sale.
For Buyers:
- More inventory and falling rates may give you more leverage and options.
- Don’t wait for a “perfect” moment—focus on what works for your family, but know that affordability should improve.
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Sources:
Fannie Mae Economic & Strategic Research Group, May 2025 Housing Forecast