Fannie Mae forecast’s US home sales will decline over the next two years.
According to Reuters, the government-sponsored enterprise Economic and Strategic Research Group raised its 2021 home sales growth projection from a prior 5.3%, citing an expected strong year-end surge in home buying. A 7.1% increase would be just under 2020’s 7.3% jump. However, the forecast showed home sales declining 1.4% next year due to limited listings and other factors, and falling 3.8% in 2023.
“The expectation that mortgage rates will continue to drift upward, averaging 3.2% in 2022, coupled with additional home price appreciation, are likely to make affordability a growing constraint on home sales in the new year,” Fannie Mae said in a statement. It added that moves by the U.S. Federal Reserve to tighten monetary policy to combat inflation “will combine with ongoing supply issues and still-appreciating home prices to slow sales activity.”