Fannie Mae now projects lower mortgage rates and increased volume for this year and next, raising its home sales expectations from June.
By contrast, the Mortgage Bankers Association cut its origination outlook for 2025 in its own July forecast. The MBA's rate expectations for both this year and next, as well as the 2026 volume prediction, were unchanged from June.
Meanwhile, the 30-year fixed rate mortgage dropped
Inside Fannie Mae's origination forecast
Fannie Mae's July outlook expects rates to end this year at 6.4% and next year at 6%, down from 6.5% and 6.1%. The MBA remained at a higher level for the 30-year fixed, which in the fourth quarter is expected to be at 6.7%; for the fourth quarter of 2026, it is calling for 6.4%.
Originations this year should top $1.92 trillion, the Fannie July forecast said. This is up from June's $1.9 trillion. The gain comes from more refinance business, $511 billion in the July outlook versus $484 billion.
Even with its expectations of more home sales, it still cut the purchase outlook by $10 billion to $1.41 trillion.
Total home sales during 2025 were revised to 4.85 million units, up from 4.82 million. Its 2026 home sales projection is now 5.35 million units, up from 5.25 million. Economists at First American Financial
How the Mortgage Bankers Association's predictions differ
The MBA now predicts $2.02 trillion of volume this year, down from $2.04 trillion. The July purchase forecast of $1.36 trillion is $10 billion lower than June, while the refi outlook of $664 trillion is $4 billion lower. It did not change its 2026 volume prediction of $2.42 trillion.
"Mortgage applications increased slightly last week, as purchase application activity continues to fare well, running higher on a weekly and annual basis," MBA President and CEO Bob Broeksmit said in a Thursday morning comment on the latest Weekly Application Survey. "We expect overall demand to ebb and flow as long as mortgage rates remain volatile due to the ongoing economic uncertainty."
What other indicators say about the mortgage outlook
As of 11 a.m. Thursday morning, the 10-year Treasury was almost 4.42%, about 1 basis point lower than at the same time seven days prior. However, this yield bottomed on Tuesday at 4.33%.
At that time, Lender Price data
Mortgage rates were little changed on the lack of big data releases — unlike the past few weeks where the relatively flat environment was attributed to news on payrolls and/or inflation, said Kara Ng, senior economist at Zillow Home Loans in a Wednesday evening statement.
"Zillow maintains its expectation that mortgage rates will end the year near the mid-6% range," the statement noted.
Digging into Freddie Mac's weekly mortgage interest rate report
This week's Freddie Mac PMMS reported the 30-year FRM averaged 6.74% on July 24. This was down from last week when it was at 6.75% and just four basis points lower than
The 15-year FRM again moved more than the 30-year product, dropping 5 basis points to 5.87%, from last week's 5.92%. The spread with a year ago at this time was also larger, at 20 basis points, when it averaged 6.07%.
"Overall, the backdrop for the housing market is positive as the economy continues to perform well with solid employment and income growth," said Sam Khater, Freddie Mac chief economist.
All consumers, but especially homebuyers, are tracking mortgage rates for "windows of opportunity" to purchase or refinance, said Samir Dedhia, CEO of One Real Mortgage in a comment on the PMMS results.
"While the movement is modest, it's another sign of continued rate stability as we move deeper into the summer," Dedhia said. "Even small improvements like these can help maintain momentum in what's been a cautious housing market."
