Tag Archives: Fannie Mae

June Housing Survey From Fannie Mae Shows Outlook Up

8 Jul

Consumers believe that their outlook is getting better. But they are not necessarily ready to participate in the housing market just yet. The June Housing Survey released by Fannie Mae shows that consumer sentiment toward the housing market is continuing to improve as the overall economic outlook improves but it still sits well below the level necessary for the market to normalize.

“Since we began collecting monthly National Housing Survey data in June 2010, we’ve seen substantial progress in consumer home price expectations and other key attitudinal measures as the housing recovery gained its footing,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

“Still, we do not expect to see ‘normal’ levels of new residential construction, in the region of 1.6 million new housing units per year, before the end of 2016, our original projection. Such a feat would require a pace of growth in housing starts not seen in decades.”

The survey indicates that consumer’s twelve month home price change expectation remained positive but dipped slightly compared to previous months, coming in at 2.4 percent. Further, 55 percent of consumers expect mortgage rates to increase in the next year.

“The uptick this month in the share of consumers expecting mortgage rates to go up and the accompanying decline in home price expectations reflect the pause of activity in the housing market so far this year,” said Duncan. “Despite recent improvement, we now expect an annual decline in existing home sales due to weak volume in the first four months of the year associated with the rise in mortgage rates mid-last year and the current dearth of supply of lower-priced homes.

There is reason to believe that activity could pick up in the second half of 2014. According to the survey, the share of consumers who said that they were worried about losing their jobs dropped to the lowest level recorded since Fannie Mae began collecting the data in 2010.

An improving expectation level is consistent with the improving employment landscape.  The newfound security could spur potential homeowners to stop putting off their next home purchase. They appear to be more confident in their ability to get it done. In fact, 52 percent of respondents to the survey thought it would be easy for them to get a home mortgage today.

A good second quarter is needed to ensure that confidence in the recovery continues to steadily improve.

Fannie Mae Confident of Continued Growth in 2014

4 Mar

February 28, 2014 In Daily Dose,Government,Headlines,News

The housing market’s cooler-than-expected first quarter should just be a temporary blip in a year of modest overall growth, according to Doug Duncan, chief economist at Fannie Mae.

Fannie Mae released Wednesday its latest economic forecast, which acknowledged that atypically harsh winter weather in much of the United States has slowed new home construction and sales in Q1 2014. But the report also reaffirms Fannie Mae’s position that the economy and housing markets will improve on 2013 growth by the end of Q4.

In an accompanying podcast to the February forecast, Duncan presented a mixed bag of growth and sluggishness in the housing market. A rise in mortgage rates, which Duncan expects to top out somewhere between 4.75 and 5 percent by year’s end, will slow existing-homes sales to about 1 percent growth this year, and maybe even less in Q1, he said.

Pending home sales plunged by 8.7 percent in December and were flat in January, leading to a rather guarded optimism that existing-home sales will show even tiny signs of improvement.

However, Fannie Mae is openly optimistic that sales of newly constructed homes should increase sharply this year, continuing last year’s trend toward more building and sales.

The caveat, Duncan said, is that the rise in new home sales is coming from a very low base. A healthy market, he said, would be about 1.7 million units built in a year. Fannie Mae predicts about 1.15 million units will be built in 2014, up from an overall 923,000 units built in 2013 (which itself was an 18.3 percent jump from 2012).

This is good news for the job market, as new construction means new jobs for builders and crews. Residential construction employment jumped by 17,000 jobs in January and should continue growing modestly in 2014, even if the numbers do not reach their pre-recession plateau of 2.5 million jobs, the report stated.

Overall mortgage volume, however, will likely be down this year, Duncan said. Higher mortgage rates are curtailing refinancing activity, even though an expected rise in mortgages for new home purchases should offset the drop a little, he said. Interest in mortgages peaked in May of 2013 and then fell by 20 percent, where it has stayed, according to the Fannie Mae forecast.

Despite a few broken bones in housing, however, Fannie Mae expects fairer weather to usher in gentle growth for the economy for the remainder of the year. The agency expects the economy overall to increase from 2.7 percent to 2.9 percent this year.

Fannie Mae Finds Consumer Confidence Low

12 Nov

Consumer confidence in the housing market plunged to an all-time low last month in the wake of the government shutdown, according to results from the Fannie Mae October 2013 National Housing Survey.

The share of people who believe it’s a good time to buy a house had the biggest ever one-month change, according to the survey, falling to a survey-low of 65%. However, the share of respondents who indicated they would buy a home in the event they moved actually increased slightly to 70%, a new survey high.

Less than half of respondents (46%) believe home prices will go up in the next 12 months, down six percentage points from September, while those saying home prices will fall increased by four percentage points to 10%.

“Housing market sentiment has clearly suffered in the wake of the recent government shutdown and debt ceiling debate,”  senior vice president and chief economist at Fannie Mae Doug Duncan said in a statement. “In October, we saw attitudes toward both the economy and the current buying environment experience their largest one-month drops in the survey’s three-year history.”

The decline in consumer optimism may foreshadow a slowing of the housing recovery, Duncan continued, but because of supply constraint, Fannie Mae predicts continued positive growth in home prices.

Only 27% of respondents believe the economy is on the right track, according to Fannie Mae, down 12 percentage points from the September survey—the biggest monthly record change in the survey’s history.

adapted from Reverse Mortgage Daily 11/11/13