Sunny Real Estate Forecast Calls For Gains

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Each month, Fannie Mae releases the findings of its Economic & Strategic Research Group. The monthly release updates their outlook for both economic growth and the housing market. According to their most recent forecast, there is evidence that economic activity was stronger than expected in the second quarter and should help boost consumer confidence and the housing market through the end of the year. Because of this, Doug Duncan, Fannie Mae’s chief economist, says the real estate market should see continued gains. “We expect to see strong sales, lean inventories, and rising confidence through the rest of the year, which should support increased home building activity and give an added boost to economic growth,” Duncan said. “Although a lack of skilled labor may hurt construction activity, our forecast calls for housing starts to average 1.12 million units. We expect existing and new home sales to climb by approximately 5 and 25 percent, respectively, and total mortgage originations to rise approximately 24 percent to $1.46 trillion, with a refinance share of 47 percent.” The positive forecast is based, in part, on strengthening consumer confidence, household net worth, and income growth prospects, which are the result of an improved job market. More here.

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