Fannie Mae expects a 16.2% drop in home sales year-to-year in 2022; one month earlier it predicted 15.6%, but “housing remains clearly on the downtrend.”
WASHINGTON – According to the latest projections from Fannie Mae’s Economic and Strategic Research Group, home sales are expected to total 5.78 million this year, down 16.2% from a year ago.
In July, one month earlier, Fannie Mae forecast a 15.6% decline.
“Housing remains clearly on the downtrend – and has been for several months now – due to the combined effects of outsized home price increases and the significant and rapid run-up in mortgage rates,” says Fannie Mae chief economist Doug Duncan. “Despite a pullback in mortgage rates over the past month, recent incoming data point to a faster near-term slowdown in sales than we had expected, especially for new homes.”
New-home sales are now projected to fall 18% to 632,000 this year, and existing-home sales are expected to drop 16% to 5.143 million. Fannie Mae forecasters said existing-home sales in June “were somewhat stronger than we had anticipated,” but “recent leading indicators of July home sales, such as pending sales and mortgage applications, point to a continued slow down.”
Meanwhile, pending sales, which lead closings by approximately 30 to 45 days on average, fell 8.6% from May to June, though by a much smaller 1% in July.
However, Fannie Mae economists also believe mortgage rates have peaked and will trend downward into next year.
Source: Inman (08/22/22) Carter, Matt
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