Housing Market's Rebound Tied To Fed

Dated: January 27 2023

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Each month, Fannie Mae's Economic and Strategic Research Group releases an outlook detailing what it thinks is ahead for the economy and housing market. The forecast covers the group's expectations for economic growth, home sales, prices, mortgage rates, and other economic factors. According to the most recent release, the group sees a rebound ahead for the housing market but can't say when it'll begin. That's mainly because where mortgage rates go from here depends on the Federal Reserve. The Fed started raising interest rates in 2022 to fight inflation.

 

Doug Duncan, Fannie Mae's senior vice president and chief economist, says there's some speculation that the Fed will slow those efforts during the second half of this year. "The market sees the Federal Reserve easing in the second half of the year, which can be interpreted either as a view that the recession is forthcoming or that the slowdown in inflation will lead to a less restrictive monetary posture," Duncan said. "If the latter occurs, the lower accompanying rates will likely set the stage for a pickup in housing activity going into 2024."

 

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Michael Downer

Your Luxury REALTOR®, Trusted Advisor — Quintessential Naples Team at Downing-Frye Realty®Michael "Mike" Downer is the REALTOR® you want in your corner when buying or selling real es....

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