Home Price Growth Expected to Cool Through 2026
Home prices in the U.S. are expected to grow more slowly over the next two years, averaging 3.4% in 2025 and 3.3% in 2026, according to a survey by Fannie Mae and Pulsenomics. These new forecasts are slightly lower than previous estimates and reflect a cooldown from the 5.8% price increase seen in 2024.
The experts in the poll had very different views, with some predicting significant gains and others expecting declines. One expert forecasted an 11% increase in 2025, while another predicted a 4.5% drop. The survey was done before recent tariff announcements, so those potential effects aren't yet factored into the projections.
Mortgage Applications Dip in the Latest MBA Survey
According to the Mortgage Bankers Association, mortgage applications dropped by 8.5% for the week ending April 11, 2025. The refinance index fell 12%, while the purchase index declined 5%. Even though purchase activity is still about 13% higher than last year, rising mortgage rates and economic uncertainty are making buyers more cautious. Mortgage rates jumped 20 basis points last week, pushing more borrowers toward adjustable-rate mortgages (ARMs), which now make up 9.6% of total applications — the highest share since late 2023.
The average interest rates for all major loan types increased. Rates on 30-year fixed mortgages for conforming loans rose to 6.81%, while jumbo loans climbed to 6.84%. FHA-backed loans increased to 6.52%, and 15-year fixed mortgages rose to 6.11%. The average rate for 5/1 ARMs also went up to 6.11%. As rates climb, more borrowers are choosing ARMs for their lower initial payments, especially for larger loan amounts.
Cited by Debbie Beesock - Loan Officer