Traditionally, the end of the year is the time when prognosticator and forecasters release their predictions for the year ahead. Fannie Mae's Economic and Strategic Research Group is no different. The group's most recent release details what they believe awaits the economy and housing market in 2023. So what do they expect?
Well, for starters, they've raised their expectations for home sales next year – though they still believe sales will fall from 2022. Among the reasons they think there will be fewer sales in 2023 is the fact that most homeowners have a mortgage rate lower than current rates and will likely be reluctant to move until rates are more favorable.
Beyond that, Fannie Mae believes a slower economy will keep housing market activity muted next year. “We expect housing to continue to slow, even though mortgage rates have come down recently,” Doug Duncan, Fannie Mae's senior vice president and chief economist said. “Home purchases remain unaffordable for many due to the rapid rise in rates over the last year and the fact that house prices, though certainly slowing and in some places declining, remain elevated compared to pre-pandemic levels.”
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