Fannie Mae Raises Forecast Again As Mortgage Refinancing Market Remains Strong

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Fannie Mae raised its mortgage outlook for this year again, with higher-than-expected refinancing and higher home prices more than offsetting the decline in home sales from last year. his June forecasts.

The government-sponsored venture’s July economic forecasts include $ 4.36 trillion in mortgages, of which $ 2.52 trillion is from refinancing. Total sales are projected at $ 4.2 trillion, of which $ 2.37 trillion in June. Because of Delta variant COVID outbreak Fannie Mae lowered its expectations for real gross domestic product in 2021 to 6.3% from 7% in June.

However, “for the housing market at the current level of business, the lack of stocks of homes for sale and the continuing supply chain bottlenecks faced by developers remain major constraints to buying,” said Mark Palim, deputy chief economist at Fannie Mae. Press release. “Moreover, while mortgage rates have come down and theoretically provide more purchasing power for potential borrowers, in practice, given the current supply and affordability concerns, we expect this benefit to be limited.”

Reflection slowing down the transition to the procurement marketthe current quarter is expected to have over 51% refrigeration volume and will be the sixth quarter with a total volume of over $ 1 trillion at $ 1.06 trillion. In June, Fannie Mae forecast total third-quarter sales of $ 958 billion, of which 46% will come from refinancing.

Fannie Mae now projects $ 830 billion in the fourth quarter with a 44% refinancing rate. This is up from $ 797 billion and 42% a month ago.

Total house sale it is expected to reach 6.66 million units for the year, up 3.1% from 6.42 million in 2020. But Fannie Mae forecast 6.71 million home sales in June.

Fannie estimates that the average selling price of a new home will be $ 384,000 per year, up from $ 335,000 a year ago, while the average price for existing house sale price $ 346,000 should surpass $ 295,000 in 2020.

According to the latest forecast, the 30-year fixed rate mortgages will remain below 3% for the rest of the year, at 2.8% in the third quarter and 2.9% in the fourth. Last month’s forecast expected rates to reach 3.1% by the end of 2021.

Fannie Mae also cut its 2022 interest rate forecast to 3.2% by the fourth quarter from a previous forecast of 3.3%. This prompted the GSE to raise its forecast for 2022 in its July report to $ 3.31 trillion from $ 3.23 trillion in June. The change in forecast is due to more processed products than previously expected at $ 1.34 trillion in July against $ 1.27 trillion in June.



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