The 30-year fixed-rate mortgage could fall below 6% by the end of 2026, according to the latest Fannie Mae forecast. That would be roughly 50 basis points lower than the government-sponsored enterprise’s year-end 2025 prediction of 6.4%.

Fannie Mae’s economics research team also revealed Tuesday it has revised its 2025 total home sales forecast lower by roughly 20,000 units, to 4.72 million from 4.74 million projected previously.

Fannie’s projection of 5.16 million total home sales in 2026 also represents a downward revision of its previous estimate of 5.23 million units. Fannie Mae economists predict existing-home sales in 2025 will lag even 2024’s 30-year low of just 4.06 million.

An uptick in homebuying activity in July represented a rebound from June, when existing home sales fell 2.7% month over month, according to National Association of Realtors data.

Whether lower mortgage rates manifest in 2026 will impact Fannie’s upwardly revised projections for originations breaking through the $2 trillion ceiling of the past few years. Total single-family mortgage originations totaled $1.68 trillion in 2024 and are estimated to reach $1.85 trillion by the end of 2025, Fannie Mae projects.

Overall, Fannie Mae revised its real gross domestic product growth outlook for 2025 and 2026 to 1.5% and 2.1%, respectively, compared to 1.1% and 2.2% previously. The consumer price index (CPI), a common measure of inflation, is expected to rise 3.1% by the end of 2025, slightly lower than the 3.3% previously forecast. Fannie left its 2026 CPI outlook unchanged at 2.6%.