Fannie Mae ESR Group Releases October Economic and Housing Outlook

On Friday, the Fannie Mae Economic and Strategic Research (ESR) Group released its October Economic and Housing Outlook.

The Group revised its forecast for real gross domestic product (GDP) growth to 1.9% in 2025 and 2.3% in 2026 on a Q4/Q4 basis, up from 1.5% and 2.1%, respectively, in the last outlook.

The ESR projects the Consumer Price Index to rise 2.9% in 2025 and 2.7% in 2026 on a Q4/Q4 basis, down from 3.1% and up from 2.6% in September’s forecast, respectively. Core CPI is expected at 3.1% and 2.6% on the same basis, both slightly lower than prior forecasts.

Mortgage rates are expected to end 2025 at 6.3% and 2026 at 5.9%, compared to 6.4% and 5.9%, respectively, in the prior forecast.

Total home sales are projected at 4.74 million units in 2025, up from 4.72 million in the prior forecast, and 5.16 million in 2026, unchanged from before. The ESR now expects home prices to rise 2.5% in 2025 and 1.3% in 2026, compared to 2.8% and 1.1%, respectively, in its prior outlook.

Single-family mortgage originations are forecast at $1.88 trillion in 2025 and $2.35 trillion in 2026, up from $1.85 trillion and $2.32 trillion, respectively, in the prior estimate.