As a result, the ESR Group believes the economy can sustain growth at or near its potential, assuming no major shocks to consumer or business confidence.
In addition, recent payroll growth in August and September has contributed to the positive outlook. However, there are still upside risks to mortgage rates, as the 10-year Treasury yield has risen more than 40 basis points from its mid-September low.
While mortgage rates were forecast to decline slightly – from 6% at the end of 2024 to 5.7% by the end of 2025 – home prices were expected to continue rising, although at a moderated pace.
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Fannie Mae projected annual home price growth of 5.8% in 2024 and 3.6% in 2025. These figures are only slight adjustments from previous forecasts, suggesting that housing affordability will remain a significant hurdle for many, especially first-time buyers. The combination of high home prices and tight inventory levels is likely to keep upward pressure on prices.
Source: mpamag.com