Each month, Fannie Mae's Economic and Strategic Research Group releases an outlook covering its expectations for the economy and housing market. In June, the group adjusted its forecast for total home sales this year, lowering expected annual gains to 1.3 percent from a previous projection of 2.8 percent. But while the group sees weaker than expected home sales ahead, it also says the economy is showing signs of slowing – which could help lower mortgage rates and improve overall affordability.
“The economy appears to be slowing, and recent readings offer hope that inflation is cooling after progress on that front stalled in the first quarter – a trend that will likely need to be sustained for the Fed to feel comfortable cutting rates,” Doug Duncan, Fannie Mae's senior vice president and chief economist, said. Additionally, the group notes that the number of homes for sale is rising and the trend should lead to decelerating home price growth. In short, affordability challenges remain but prospective home buyers may soon see relief as the market gains better balance.
[Source: Fannie Mae]
