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The national economy is running out of steam and further declines in home prices are expected, economists at Fannie Mae forecast, but interest rates could start falling by year’s end.

“The economic slowdown has resumed – whether the end result is a modest recession or simply a soft landing remains unanswered – although we continue to expect the former, as we have since April of last year, when we first made our 2023 recession call,” Fannie Mae chief economist Doug Duncan said in a statement released along with the mortgage-buyer’s April economic forecast.

Duncan and his colleagues believe house prices will fall by 1.2 percent nationwide this year, a smaller fall than the 4.2 percent drop they last predicted, and an additional 2.2 percent in 2024. But they also raised their expectations for the total number of homes sold nationwide this year, from 4.63 million sales in their last projection to 4.84 million in this month’s. That’s still a “subdued” pace, the economists wrote in the April forecast, and the slowest annual pace of sales since 2011.

The latest Case-Shiller S&P Core Logic Home Price Index reading, released Tuesday, showed Boston-area home values rose 0.1 percent from January to February and 2.2 percent from February 2022 to February 2023. The index showed values were up 0.2 percent nationally from January to February and up 2 percent from February last year to February of this year. An analysis by S&P economists described the changes as a “moderation” in what had been seven-month decline in nationwide home values.

If Fannie Mae’s predictions don’t look like a forecast for a particularly bad recession to you, you’re not alone. Duncan’s statement continued on to explain that despite some key economic indicators softening in March and credit availability tightening so much that the effect resembles an additional Federal Reserve interest rate hike, the housing market’s durability will likely mean an recession this year won’t be too bad.

“The greater-than-expected resilience of the housing sector to the affordability pressures of higher home prices and mortgages rates is central to our expectation that the recession will be modest,” Duncan said. “In our view, while it would be premature to expect no further difficulties in the banking sector other than credit tightening, we’re maintaining our baseline expectation of a modest recession, as we see signs of a weakening employment market, slowing retail sales, and declining manufacturing activity. However, the rapid response of hopeful homeowners to periodic declines in mortgage rates, even from the currently higher rates, gives us additional confidence in our use of the word ‘modest.’”

Locally, the latest business conditions index from Rhode Island-based bank Citizens suggests that in the first quarter of this year, the Massachusetts economy bounced back from its fourth-quarter doldrums. The Citizens Business Conditions Index, based on the activity of Citizens’ commercial banking clients and economic data like jobless claims and manufacturing data, rose 4.1 percent quarter-over-quarter. It’s still down 9.1 percent year-over-year in Massachusetts, as the Federal Reserve’s interest rate hikes dragged down the state economy, Citizens co-head of global Markets Eric Merlis said, but the labor market is staying strong, inflation is on the wane and Citizens’ clients saw revenue grow as some found success passing rising costs on to consumers.

“Policy-makers are still trying to thread the needle amid heightened recession concern, but companies that have made it through the pandemic and recent headwinds continue to prove their resiliency,” Merlis said in a statement accompanying the index’s release