Fannie Mae’s Economic and Strategic Research Group released findings showing that during the Second Quarter of 2015, growth in the economy was weaker than expectations. However, even with this unfavorable finding, the research group hasn’t revised its forecast for the real estate housing market noting there are many positive signals if one looks.
Doug Duncan, a chief economist at Fannie Mae points out that job creation continues to be steady and employment for full-time workers is nearing pre-recession figures. In addition, net worth for many households continues to rise, however, income growth still needs improvement.
Duncan was quoted as saying, “We hold by our previous comments that income growth still needs to strengthen, particularly for younger households, in order to drive significant housing growth, but we are nonetheless seeing some positive improvements in the housing sector.” He continued, “Home sales have trended up and inventory for available homes for sale and condominiums for sale are lean, supporting strong home price appreciation. That price growth, driven by laggard supply response, helps build equity for existing owners but is a headwind for first-time home buyers.”
Even so, Fannie Mae is confident that rates for mortgages will rise only gradually over the coming year, and as a result, real estate purchases should continue to be affordable despite continued price gains.