WASHINGTON–Mortgage rates are now are projected to end 2025 and 2026 at 6.3% and 6.2%, respectively, reflecting downward revisions of three-tenths for each, according to the March 2025 commentary released by Fannie Mae’s Economic and Strategic Research (ESR) Group. 

The lower mortgage rate outlook resulted in a small upward revision to the ESR Group’s existing home sales outlook in 2025, though expectations for total home sales remain subdued, Fannie Mae said, adding that on a Q4/Q4 basis, real gross domestic product (GDP) is now expected to be 1.7% in 2025 and 2.1% in 2026, “modest downward revisions owing to weaker incoming data and greater clarity on trade policy.”

‘Small Boost’

“We expect the recent pullback in mortgage rates will provide a small boost to home sales this year,” Mark Palim, Fannie Mae SVP/chief economist said in a statement. “While our latest forecast calls for a period of modestly slower economic growth, historically, interest rates have been the most important driver of home sales. We think mortgage rates will move even lower within the next quarter and ultimately close the year at approximately 6.3 percent, which could be low enough to generate some extra sales from any would-be buyers still waiting on the sidelines.”

The full Fannie Mae analysis and projections can be found on the Economic and Strategic Research site at fanniemae.com. To read the full March 2025 Economic Outlook, including the Economic Developments Commentary, Economic Forecast, and Housing Forecast. To