Fannie Mae Housing Forecast: Home Sales to Edge Up Less Than 1% in 2027 as Price Growth Slows to 0.6%

Franklin, Tenn. — October 17, 2026

The latest Fannie Mae housing forecast expects the home-buying market to hold roughly steady next year rather than recover, with total home sales rising less than 1% and national price growth slowing to its weakest pace in the forecast, according to the October housing outlook from the company's Economic and Strategic Research Group.

Fannie Mae housing forecast: 2027 home sales and prices

The forecast, dated Oct. 12, projects total home sales of about 4.71 million in 2027, up 0.9% from an estimated 4.67 million this year, which would be 1.7% below 2025. Existing-home sales, which include single-family homes, condominiums and co-ops, are forecast at about 4.06 million next year compared with 4.03 million in 2026. Sales of newly built single-family homes are projected at 652,000, up 1.7% from 641,000 this year, after a 5.5% decline in 2026.

Price growth is expected to cool. The Fannie Mae Home Price Index is forecast to rise 2.7% from the fourth quarter of 2025 to the fourth quarter of 2026, then just 0.6% over the course of 2027, according to the outlook. Quarterly year-over-year gains are projected to shrink from 3.4% in the third quarter of this year to 0.6% by the second half of 2027.

A higher rate assumption cuts refinancing, not purchase lending

The outlook rests on a sharply higher rate assumption. The research group now expects the 30-year fixed-rate mortgage to average 7.4% in the fourth quarter of 2026 and 7.5% in every quarter of 2027, according to the forecast table. Its September outlook had called for 6.8% in the current quarter and 6.7% for next year, CNBC reported Oct. 14. Fannie Mae noted that its interest rate forecasts are based on rates as of Sept. 30.

Even with higher borrowing costs, the forecast shows lending for home purchases holding its ground. Purchase mortgage originations are projected at about $1.435 trillion in 2027, essentially flat with an estimated $1.429 trillion this year. The revision instead falls on refinancing, which Fannie Mae now expects to total $430 billion next year, down from $802 billion in its prior outlook, HousingWire reported. Total single-family originations for 2027 were cut 18% to about $1.86 trillion from $2.27 trillion.

That split means the market next year is expected to be driven almost entirely by people buying homes rather than by existing owners replacing their loans. Refinancing is projected to account for 23% of originations in 2027, down from 31% this year, according to the forecast.

What the forecast means for home buyers

For buyers, the combination of flat sales and slower price growth suggests a market with less competition than in recent years, though higher financing costs continue to weigh on monthly payments. New construction is forecast to remain subdued as well: total housing starts are projected at about 1.30 million next year, down 2.9% from 2026, with single-family starts roughly flat at 898,000. Buyers weighing a purchase can estimate a monthly payment at a given price with Iron Hill Mortgage's affordability calculator.

Fannie Mae cautions that the views of its research group are based on a number of assumptions, are subject to change and do not necessarily represent the views of the company or its management. The Federal Open Market Committee's next policy decision is scheduled for Oct. 28.

Sources

• Fannie Mae Economic and Strategic Research Group, "Housing Forecast: October 2026," Oct. 12, 2026: https://www.fanniemae.com/media/58256/display
• CNBC, "Fannie Mae sharply raises mortgage rate forecast for 2027," Oct. 14, 2026: https://www.cnbc.com/2026/10/14/fannie-mae-sharply-raises-mortgage-rate-forecast-for-2027-.html
• HousingWire, "Fannie Mae cuts 2027 origination outlook 18% on weaker refi volume," October 2026: https://www.housingwire.com/articles/fannie-mae-cuts-2027-mortgage-forecast/