Home sales are expected to reach 4.86 million units in 2025, according to the April 2025 Economic and Housing Outlook report from Fannie Mae. The newly revised figures are a decline from the March forecast of 4.95 million homes to be sold this year.

The report, which was written by Fannie Mae’s Economic and Strategic Research Group, revises Fannie Mae’s economic outlook for the next two years. The forecast points out how quickly the economic environment has changed in the past month. Now, Fannie Mae expects the economy to slow, inflation to increase and home sales to slacken over the course of 2025.

The group expects economic growth to decline to 0.5% this year before rising to 1.9% in 2026. That prediction is down from the March forecast of an economic growth rate of 1.7% in 2025, followed by 2.1% in 2026.

Home prices are expected to rise 4.1% this year and 2% in 2026, compared to March’s estimate of 3.5% and 1.7%. The Consumer Price Index (CPI), a main gauge of inflation, is expected to rise 3.5% between the fourth quarter of 2024 and the fourth quarter of 2025, and increase 2.6% in 2026. Core CPI, which strips out food and energy costs, is expected to rise even more this year to 3.9%, before cooling to 2.6% in 2026.

Some good news in the report is that mortgage rates are expected to fall to about 6.2% by the end of 2025 and decline slightly to 6% in 2026. That forecast is an improvement from earlier estimates of 6.3% in 2025 and 6.2% in 2026. Mortgage originations are also expected to rise to $1.98 trillion and $2.33 trillion, respectively, for 2025 and 2026, compared to the previous forecast of $1.94 trillion and $2.28 trillion, respectively.