Fannie Mae Cuts 2026 Multifamily Starts to 454,000 Units
Fannie Mae lowered its 2026 multifamily housing forecast to 454,000 units. Single-family starts also declined in the latest update.
Key points
- Fannie Mae cut its 2026 multifamily starts forecast to 454,000 units, down 11,000 from last month.
- The Fed Funds rate is now expected to reach 4.1 percent by Q1 2027, up from 3.6 percent.
- Single-family starts for 2026 were revised down to 897,000 units, reflecting broader construction slowdowns.
Fannie Mae reduced its 2026 multifamily housing starts forecast to 454,000 units. This marks a drop of 11,000 units from the previous month's estimate.
The 2027 projection fell to 417,000 units, a decrease of 10,000 units. Single-family housing starts also saw downward revisions across several quarters.
Quarterly multifamily projections decline
The largest cut occurred in Q3 2026, where starts dropped by 49,000 annualized units. The current prediction for that quarter is 455,000 annualized units.
August Census Bureau data showed multifamily starts running at 407,000 annualized units. This actual figure is well below the current forecast for the third quarter.
Interest rate expectations shift
Fannie Mae now predicts the Fed Funds rate will rise to 4.1 percent by Q1 2027. This contrasts with previous forecasts that kept the rate at 3.6 percent.
The 10-year Treasury rate forecast remained largely unchanged at 4.9 percent by end-2027. This stability suggests limited immediate pressure on real estate financing costs.
Single-family and GDP outlook
Single-family starts for 2026 were cut to 897,000 units, a reduction of 7,000 units. The 2027 forecast decreased slightly to 909,000 units.
GDP growth forecasts showed minimal changes, with Q4 2026 rising by 0.1 percentage points. The Q3 2026 growth estimate of 2.4 percent aligns with consensus views.
