What’s the latest housing market prediction from Fannie Mae?
Fannie Mae’s Economic and Strategic Research Group recently published an updated economic forecast for 2023. The ESR group detailed a prediction for the housing market that includes a growth decline of 4.2% for 2023 followed by a 2.3% decline in 2024. The forecast was updated from 1.5% in 2023 and 1.4% in 2024.
The good news is that the ESR group stated that “fewer borrowers are facing interest rate shocks, loan workout and modification programs are more robust, and aggregate residential real estate and the broader financial system are substantially less leveraged compared to the 2006-2008 period,” when asked if the predicted price adjustment is going to look similar to the 2008 crisis. The situations really couldn’t be more different at this point, and the upcoming decline should not mirror the 2008 crisis.
How did the mortgage rate market start the week?
The national average for a 30-year, fixed rate mortgage ended trading up 0.04% at 6.54%* on Monday. However, analysts mentioned that this could end up being a volatile week with a lot of potentially marketing moving data set to be released.
The excitement will likely start with an inflation reports set to be released today that could send mortgage rates in either direction, but there will be plenty of news to follow in the coming days.
Could the housing market in San Francisco signal a national change?
According to recent data, home prices in the San Francisco metro area are selling below asking price for the first time on over a decade. The average sale-to-list in the San Franisco area was 99.2% in December 2022. This was the first time since February 2012 that its fallen below 100%. For context, the pandemic low was 101.4%, and the peak was in April of 2022 at 111.6%.
San Francisco has historically been one of the most expensive metros in the country. A weakness in the market there could signal that home prices might start to come down in other areas as well. This is definitely a trend that potential homebuyers and sellers should keep an eye on.
* National average rates accurate as of 2/13/23 from mortgageratenewsdaily.com and are not advertised rates from Guaranteed Rate.
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