Fannie’s Forecast: Rough in 2023, Better in 2024
The GSE’s economic and research group thinks the U.S. hasn’t seen the full impact of higher mortgage rates yet, but 2024 will be better after a slow-down year.
WASHINGTON – Fannie Mae’s Economic and Strategic Research Group predicts that single-family home sales will total 5.67 million this year, then fall to 4.42 million in 2023 before rising to 5.25 million in 2024.
The group forecasts that total mortgage origination activity will reach $2.34 trillion in 2022, decline to $1.74 trillion in 2023 and then increase to $2.11 trillion in 2024.
According to the Fannie Mae economists, the full effect of rate increases on home sales hasn’t been fully felt yet. However, they also said first-time homebuyers may turn to new homes as fewer existing homeowners list their homes for sale.
“Given this, homebuilders may focus more on comparatively modest product offerings as the number of move-up buyers is low,” Fannie Mae says.
“From our perspective, the good news is that demographics remain favorable for housing, so the sector appears well-positioned to help lead the economy out of what we expect will be a brief recession,” says Doug Duncan, senior vice president and chief economist at Fannie Mae.
Source: HousingWire (11/21/22) Kim, Connie
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