Fannie Mae: Housing recovery could be ‘more robust’ than anticipated
Tight inventory, rising prices may hold back existing-home sales this year
BY INMAN NEWS, WEDNESDAY, APRIL 17, 2013. Inman News®
A continued recovery in housing and rising home prices should provide a cushion to economic growth this year, offsetting the hampering effects of tax increases and government spending cuts, according to a monthly economic outlook released today by economists at Fannie Mae.
A shortage of homes for sale lead to home price appreciation at the national scale in 2012 and continuing into 2013. Fannie Mae anticipates existing home prices will rise 5.1 percent this year, to a median $186,000, and 3.8 percent in 2014, to $193,000. Prices for new homes are expected to increase 4.1 percent in 2013, to a median $254,00, and 3.5 percent in 2014, to $263,000.
But higher-than-expected price jumps and continued tight inventory will likely restrain existing-home sales this year and next year, leading Fannie Mae economists to downwardly revise their sales expectations this month.
They project that existing-home sales, which were up 9.4 percent last year, will grow by an additional 6.9 percent this year, to 4.98 million homes, compared to last month’s projection of a 10.5 percent jump this year, to 5.15 million homes. They estimated existing-home sales will rise 5.5 percent in 2014, to 5.26 million homes, compared to last month’s prediction of a 6.2 percent rise.
Nonetheless, sales of new single-family homes are expected to post stronger growth than previously predicted in 2013, 18 percent, though slightly lower growth than anticipated in 2014, 35.8 percent.
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