Fannie Mae now forecasts a 7.3% rise in home sales for 2026, down from earlier predictions. Mortgage rates are expected to average around 6.2% early in 2026, dipping to 5.9% by year-end. Home price growth is projected to slow to 1.3%, with housing starts declining 2.5%. Affordability remains a challenge, requiring significant price drops or rate cuts to boost homebuying. The Federal Reserve's rate decisions may impact mortgage rates.