Fannie Mae’s ESR Group revised downward its forecast for existing home sales, predicting an annual sales rate at its lowest since 1995, due mainly to the lock-in effect and persistent affordability constraints.
Fannie Mae has revised their outlook for the U.S. economy and housing market. Their December report predicts an economic deceleration in 2024, along with a slow recovery for home sales and mortgage originations.
Fannie Mae’s ESR Group published its August 2023 commentary on recent economic data and its likely impact on the housing market. Data points to an eventual downturn, which they now expect in the first half of 2024, though a soft landing is possible.
A recent Fannie Mae blog highlights the resilience of consumer aspirations to homeownership in spite of elevated mortgage rates, high home prices, and limited inventory. For 87% of consumers, owning a home is an important part of living the good life.
The newest Fannie Mae forecast includes a modest recession in the second half of the year rather than the second quarter. The ESR Group doesn’t expect a repeat of the 2008 Financial Crisis, but something closer to the Savings & Loan Crisis of the 1980s.
The Fannie Mae ESR Group reports a strong start in 2023 for the economy and housing market, but recent data points to more aggressive action by the Federal Reserve and a modest recession likely in the second quarter.
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