We think the window for further Fed interest rate cuts has closed, so mortgage rates should remain near their current 7% level this year, before a little more relief arrives in 2026. There will still be room for sales to improve, aided by less restrictive supply conditions, though the recovery will be very shallow, with existing home sales reaching 4.3m annualised by year-end and 4.7m by end-2026. Slightly stronger demand should counter rising inventory, ensuring continued house price growth. We have pencilled in 4% house price gains in both 2025 and 2026.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services