Fannie Mae: Economy Strong Heading into 2025 Amid Policy Uncertainty
Incoming GDP, labor market and inflation data point to an economy that entered 2025 with strong momentum, according to the Fannie Mae Economic and Strategic Research (ESR) Group. Although the ESR Group’s GDP outlook for year’s end is unchanged at 2.2%, it revised upward its expectations for the Consumer Price Index, now forecast to end 2025 at 2.8% on a year-over-year basis, up from 2.5% previously.
“Economic growth was strong to start the year as fourth-quarter personal consumption data came in above our expectations,” said Kim Betancourt, Fannie Mae VP of multifamily economics and strategic research. “Going forward, we expect the economy to decelerate slightly as consumer spending slows to a level more consistent with its historical relationship to income. However, ongoing uncertainty around trade policy adds risk to our GDP and inflation outlooks.”
The ESR Group now expects mortgage rates to end 2025 and 2026 at 6.6% and 6.5%, respectively, in upward revisions from its prior outlook.
Pictured: Fannie Mae headquarters.
