Excerpt: “The recent jump in the 10-year Treasury yield and the resulting rise in mortgage rates are expected to continue to weigh on existing home sales in the near future, likely keeping them at or near their lowest level since 1995, according to the January 2025 commentary from the Fannie Mae (FNMA/OTCQB) Economic and Strategic Research (ESR) Group. The ESR Group’s latest forecast sees mortgage rates closing 2025 and 2026 at 6.5% and 6.3%, respectively, up from the previous forecast of 6.2% and 6.0%. Additionally, the ESR Group expects home price appreciation to decelerate to 3.5 percent in 2025, down from 5.8 percent in 2024. Moreover, home price appreciation is likely to vary considerably by location due in part to regional differences in construction activity and the current supply of homes for sale. While the ESR Group notes that recent economic data points to a strong end for 2024, particularly in the labor market, little change was made to its outlook for economic growth, reaffirming its view for continued-but-slowing real GDP expansion this year. The ESR Group expects 2025 year-total growth will be 2.2 percent, following predicted final 2024 growth of 2.5 percent.”
