National Association of Realtors<\/a><\/strong>.<\/p>\n\u201cIf a recession is avoided, then ongoing limited supply of homes for sale on the market combined with continued affordability constraints and the ongoing \u2018lock-in\u2019 effect, whereby existing owners do not want to give up their current low mortgage rates, is expected to lead to a low pace of sales,\u201d according to the ESR group.<\/p>\n
Rising mortgage rates will also exert more downward pressure on sales. However, given the already very low pace of sales, the majority of highly interest-rate-sensitive borrowers are already on the sidelines and current sales activity is being supported by less rate-sensitive buyers, Fannie Mae said.<\/p>\n
In the case of a recession scenario, interest rates would likely pull back somewhat, lessening the lock-in effect thereby potentially boosting the number of homes available for sale. <\/p>\n
However, in a recession, a weaker labor market, tighter credit, and lower consumer confidence would act as downward pressure on housing, Fannie Mae noted. <\/p>\n
In contrast, new home sales and construction, while choppy in recent months, have generally been on an upswing.<\/p>\n
Single-family housing starts jumped in July by 6.7% to a pace of 983,000 annualized units. This was 9.5% higher than a year prior, the first annual increase since April 2022.<\/p>\n
However, based on permits being substantially lower at 930,000, Fannie Mae expects some pull-back in the near term, especially given the recent rise in mortgage rates. <\/p>\n
Fanie Mae expects a modest pullback in construction due to a slowing economy, though a similar outcome may occur if instead a soft landing is accompanied by higher for longer mortgage rates leading to slower housing construction and sales. <\/p>\n
\u201cIn fact, somewhat softer housing construction and sales may be needed to make a soft landing possible,\u201d according to the ESR group. <\/p>\n
Mortgage originations forecast little changed<\/h2>\n
The forecast for purchase origination volume in 2023 is largely unchanged at $1.3 trillion.\u00a0<\/p>\n
For 2024, the ESR group revised upward its forecast of purchase mortgage originations volumes by $25 billion to $1.5 trillion, consistent with upward revisions to the home sales forecast.<\/p>\n
Refinance volumes are expected to be $261 billion in 2023 and $456 billion in 2024, representing downgrades of $4 billion and $9 billion, respectively, from the July projections. <\/p>\n
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Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Strong consumption data combined with slowing inflation points to a “soft landing” for the economy, Fannie Mae‘s Economic and Strategic Research (ESR) Group said Thursday. But the government sponsored enterprise still expects a recession next year. \u201cIn order to achieve a soft landing, economic growth will have to slow to a rate that is below […]<\/p>\n","protected":false},"author":2,"featured_media":4282,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33,1],"tags":[],"_links":{"self":[{"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/posts\/4506"}],"collection":[{"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/comments?post=4506"}],"version-history":[{"count":0,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/posts\/4506\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/media\/4282"}],"wp:attachment":[{"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/media?parent=4506"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/categories?post=4506"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/tags?post=4506"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}