According to Fannie Mae's latest forecast, the housing market is expected to experience some upside in the coming years, although persistent challenges will limit a significant shift. The mortgage giant predicts that total home sales in 2024 will reach approximately 4.8 million, remaining relatively flat compared to this year's anticipated level. However, there is hope for a jump to 5.4 million in 2025.

Fannie Mae highlights that slow sales are primarily attributed to factors such as unaffordability, lock-in effects, and a lack of existing inventories, which have been freezing a significant portion of the housing market. While the company anticipates these dynamics to slowly dissipate over time, they are likely to remain obstacles throughout 2024.

Existing home sales are expected to undergo a slow recovery starting next year, following a likely low point in October, where sales hit a seasonally adjusted annualized rate of 3.79 million. Meanwhile, sales of new homes have continued to benefit from the housing shortage and the willingness of builders to provide mortgage buydowns.

In terms of mortgage rates, the recent shift in monetary policy has led to a considerable drop in rates this quarter. Fannie Mae projects that the 30-year fixed rate will average 6.7% in 2024, falling slightly to 6.2% in 2025. Despite the decline, current mortgage rates are similar to those experienced during the summer of this year when they briefly soared close to 8%.

Fannie Mae expects price appreciation and increased refinancing activity to positively impact single-family mortgage originations. The company predicts a rise from $1.5 trillion to $1.9 trillion in 2024 and further to $2.3 trillion in 2025.

However, Fannie Mae does not foresee the momentum witnessed in 2023 carrying over into the coming years in terms of home price growth. According to the company's latest quarterly survey conducted in October, respondents anticipate home price growth of 2.4% and 2.7% in 2024 and 2025, respectively, following an estimated surge of 5.9% this year.

Regarding new construction, Fannie Mae acknowledges that an economic slowdown is likely to affect housing starts in 2024. Nevertheless, low interest rates are expected to support a jump in single-family starts through 2025. On the other hand, multifamily starts are anticipated to level off, given the existing inventory and expectations of muted rent growth.

As the housing market navigates these challenges, industry experts will closely monitor the progress in sales, mortgage rates, and market trends to gain insights into the future trajectory of the real estate industry.

Note: The generated article incorporates the entities, numbers, and dates mentioned in the provided information.