WASHINGTON – In a revised outlook, single-family home sales are expected to close 2025 at 4.86 million units, and new single-family construction is expected to total approximately 964,000 units this year, according to the April 2025 Economic and Housing Outlook from the Fannie Mae Economic and Strategic Research (ESR) Group.
Revisions to the housing forecast were driven by a combination of recent actuals and adjustments to the ESR Group’s expectations for the macroeconomy, including economic growth, which is forecast at 0.5% for full-year 2025 and 1.9% for 2026, according to Fannie Mae.
Key Takeaways
Among the key takeaways:
- The ESR Group has revised its real gross domestic product (GDP) growth outlook for 2025 and 2026 to 0.5% and 1.9% on a Q4/Q4 basis, down from 1.7% and 2.1% in our prior forecast, respectively. These changes reflect recent incoming economic data over Q1 2025.
- The ESR Group said it now expects the Consumer Price Index (CPI) to rise 3.5% Q4/Q4 in 2025, compared to 3.2% in our March outlook. Core CPI is expected to rise 3.9% Q4/Q4 in 2025 and 2.6% in 2026.
- It is forecasting mortgage rates to end 2025 and 2026 at 6.2% and 6.0%, respectively, down from 6.3 and 6.2% in our prior forecast.
- The home sales outlook for 2025 has been revised to 4.86 million, down from 4.95 million previously. Comparatively higher expected sales for Q1 partially offset a downward revision to the outlook for the remaining quarters of 2025.
- The ESR Group expects home prices, as measured by the Fannie Mae Home Price Index (FNM-HPI), to rise 4.1% in 2025 and 2.0% in 2026, compared to 3.5% and 1.7% in our previous quarterly forecast.
- It is also project9ing mortgage originations to rise to $1.98 trillion and $2.33 trillion, respectively, for 2025 and 2026, compared to our previous forecast of $1.94 trillion and $2.28 trillion, respectively.
