Question: What do Fannie Mae’s latest mortgage rate forecasts suggest for market activity and how should lenders respond?

Answer:

Fannie Mae’s June 2025 forecast offers a glimmer of relief, projecting a slight downward trend in mortgage rates over the next two quarters, reaching an average of 6.6% in Q3 and 6.5% by the end of the year. This follows a period of significant rate volatility and affordability challenges that have constrained both homebuyers and homeowners. Lenders should prepare for a potential, albeit modest, increase in market activity, particularly among rate-sensitive borrowers who may have been waiting for more favorable conditions. This could translate to a slight uptick in refinancing inquiries and renewed purchase demand, especially in segments where even small rate movements can impact affordability. Professionals should focus on engaging potential buyers and existing homeowners with clear communication about market trends and affordability solutions. Strengthening client retention strategies will also be crucial as rates stabilize, helping to secure market share.