Fannie Mae predicts housing slump until 2026; 30% price drop needed, 6.6% mortgage rates forecast for 2024.

Sharing is Caring!

Let’s dive into the latest scoop on the housing market, and folks, it’s not looking too rosy.

Fannie Mae, the big player in the mortgage game, just dropped a bombshell prediction: the housing market might remain in a slump until at least 2026 unless prices take a nosedive of over 30%. That’s a tough pill to swallow for those dreaming of that idyllic sub-6% mortgage rate.

Speaking of rates, Fannie Mae expects the 30-year fixed-rate mortgage to average a hefty 6.6% in 2024, climbing down to 6.2% in 2025. Looks like we’ll be stuck with higher rates for a while longer, folks.

And the impact? Both existing and new home sales are taking a hit as interest rates climb higher, sending shockwaves through the market. Even the Fannie Mae Home Price Index is feeling the pressure, with forecasts showing a modest 3.2% increase in 2024.

But hold on to your hats, because there’s more. Purchase origination volume is expected to reach $1.4 trillion in 2024, a slight bump from 2023 but not quite the leap expected. Refinance origination volume is also downgraded, signaling tightening financial conditions ahead.

See also  Condos are getting hit hard from all sides. Big price cuts in FL.

Goldman Sachs adds to the gloom, stating that financial conditions are tightening up. Is this the start of an early spring for the housing market, or are we witnessing a listing explosion?

And here’s an interesting tidbit: Saturdays usually see the peak of listings each week, but it seems Davidson County in Greater Nashville is leading the charge with this trend, accounting for about 40% of the market.

In the midst of all this, the Mortgage Bankers Association reports a decrease in mortgage applications in their weekly survey, adding another layer to the complex puzzle of the housing market.

So, what’s the verdict? Well, it’s a rollercoaster ride of ups and downs, twists and turns. Buckle up, folks, and let’s see where this wild ride takes us next.

Sources:


www.fanniemae.com/research-and-insights/forecast/economic-developments-march-2024





www.calculatedriskblog.com/2024/03/mba-mortgage-applications-decreased-in.html

See also  Consumer price index rose 19% since 2021, reducing real incomes
Views: 152

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.