Lower rates to give mortgage lending a short-term lift

29th September 2025

We expect recent mortgage rate declines to support stronger lending and sales, prompting us to raise our end-2025 existing home sales forecast to 4.35m annualised, up from 4.15m. However, based on our relatively hawkish Fed view versus the market, we expect the downward trend in rates to soon reverse, curbing the recovery and pulling transactions back to 4.25m by end-2026 and 4.20m by end-2027.

Subscriber content

Read this in full, free

Start a free trial and use one of your 10 free starter credits to unlock this piece.

Business Email

Country

Free. 10 articles. No card required.

By completing this form you are agreeing to our Terms and Conditions for the provision of a free trial of Capital Economics' services. We take your privacy seriously and will not share your details with others without your consent. By providing your details, including your email address, you are consenting to Capital Economics sending you macroeconomic commentary and analysis. You can unsubscribe at any time. See our Privacy Policy for more information.

Already a client or trialist? Log in to read this.