Fannie Mae Upgrades 2023 Home Price Outlook But Forecasts Slowdown Ahead As Affordability Worsens

Fannie Mae economists upgraded their 2023 home price forecast to 6.7% growth, up from 3.9%, due to home prices proving more resilient than expected.

However, they still expect home price growth to decelerate to 2.8% by end of 2024 amid affordability challenges.

Total home sales forecasts for 2023 and 2024 were revised slightly down due to higher expected mortgage rates.

The economy likely faces fewer headwinds than thought previously, increasing chances of a soft landing.

While inflation is slowing, rates are still expected to be higher for longer until inflation stabilizes at 2%.