03/22/2024 | Press release | Distributed by Public on 03/22/2024 10:25
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Financing for quality, affordable rental housing in every market, every day
Reducing risk and enhancing housing finance liquidity
All Resources to Manage Financial Uncertainty
All Resources for Recovering from a Disaster
Recovery Assistance for Homeowners
Recovery Assistance for Renters
Key Takeaways:
The Fed's updated SEP continued to show the median participant expecting three 25-basis point rate cuts this year, in line with our current forecast. However, we noted in our March commentary that stronger-than-expected inflation and payroll employment data may delay rate cuts and pose some upside risk to mortgage rates.
Existing home sales came in well above expectations, particularly given the rise in mortgage rates since the start of the year and the decline in pending sales of 4.9 percent in January. We will likely revise upward our near-term sales outlook due to today's report, and we still expect a general upward trend in sales for 2024. However, the February jump may prove unsustainable. A pullback in March would not be surprising. We also note that the low months' supply suggests that there will be continued upward pressure on home prices. The jump in single-family starts also beat our expectations and will likely lead to a modest upward revision to our near-term forecast. Still, we expect new single-family home construction will remain robust this year, consistent with another rise in homebuilder sentiment and ongoing demand for new homes. The February strength likely reflects in part a rebound from poor weather conditions in January, which suppressed activity. Consistent with this view, the typically more indicative permits series posted a more modest gain.
Nathaniel Drake
Economic and Strategic Research Group
March 22, 2024
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.