01/21/2022 | Press release | Distributed by Public on 01/21/2022 13:08
Key Takeaways:
The strong housing starts figure, when considering revisions to previous months, was in line with our quarterly expectations. Additionally, there were 1.5 million total homes currently under construction, the highest level since 1973, which we believe continues to highlight the supply chain issues and labor shortages faced by builders. In fact, despite the NAHB survey remaining above its historical average, their press release stated that material shortages were adding weeks to single-family construction timelines. While we continue to expect 2022 to be a strong year for starts as builders eventually work through their backlogs and supply chain difficulties ease, the recent increases in mortgage rates present some downside risk to this forecast. On the existing sales front, we had expected some decline in December as recent months' elevated sales numbers appeared to be unsustainable given the lack of inventory available for sale, though the actual decline was somewhat larger than anticipated. Given that the months' supply hit another record low and affordability is increasingly a concern as home prices have surged and 30-year fixed mortgage rates have increased around 50 basis points since the beginning of 2022, we may modestly downgrade our near-term existing sales forecast.
Nathaniel Drake
Economic and Strategic Research Group
January 21, 2022
Opinions, analyses, estimates, forecasts and other views of Fannie Mae's Economic and Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.