{"id":10267,"date":"2023-12-17T12:46:45","date_gmt":"2023-12-17T12:46:45","guid":{"rendered":"https:\/\/imsfund.com\/?p=10267"},"modified":"2023-12-17T12:46:45","modified_gmt":"2023-12-17T12:46:45","slug":"fannie-mae-expects-home-sales-to-bottom-out-heres-what-the-latest-forecast-says","status":"publish","type":"post","link":"https:\/\/imsfund.com\/index.php\/2023\/12\/17\/fannie-mae-expects-home-sales-to-bottom-out-heres-what-the-latest-forecast-says\/","title":{"rendered":"Fannie Mae Expects Home Sales to Bottom Out? Here&#8217;s What the Latest Forecast Says"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div :class=\"{ 'hidden': $store.proContent.showFullPrompt() }\">\n<section class=\"px-4 relative border border-slate-200 mobile-toc lg:hidden\" x-data=\"{open:false}\">\n<button x-on:click=\"open = !open\" class=\"flex items-center gap-4 my-2 border-none w-full\"><br \/>\n<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"h-6 w-6\" fill=\"none\" viewbox=\"0 0 24 24\" stroke=\"currentColor\" stroke-width=\"2\"><path stroke-linecap=\"round\" stroke-linejoin=\"round\" d=\"M4 8h16M4 16h16\"\/><\/svg><\/p>\n<p class=\"font-semibold text-slate-800 text-base m-0 js-toc-ignore\">In this article<\/p>\n<p><\/button><\/p>\n<\/section>\n<p><span data-preserver-spaces=\"true\">Fannie Mae is predicting a recession in 2024 in its latest\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.fanniemae.com\/research-and-insights\/forecast\/economic-developments-november-2023#housing-forecast-changes\" target=\"_blank\" rel=\"nofollow noopener\"><span data-preserver-spaces=\"true\">Economic Developments report<\/span><\/a><span data-preserver-spaces=\"true\">. As a result, home sales are expected to bottom out next year before ultimately improving in 2025.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">A 2024 recession has been repeatedly predicted by think tanks, individual economists, and financial experts. Fannie Mae adds its own forecast to the growing chorus of experts saying the same thing: Despite a strong economy, the U.S. is headed for a mild economic downturn next year.<\/span><\/p>\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">An Economy Built on Shaky Foundations Means an Inevitable Crash<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Why is this the most likely economic trajectory? For one, experts at Fannie Mae point out that the\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/gdi-weakness-paints-picture-of-a-weaker-economy-than-we-think\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">high GDP as of the third quarter<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0of 2023\u2014a very healthy 4.9%\u2014is built on shaky foundations. This is economic growth fueled by debt spending rather than substantial growth in real income.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">In fact, real incomes grew by a very small 0.6% annualized in the third quarter. Simultaneously, the savings rate is declining and was 3.4% during the same period, a far cry from the robust 7% rate before the pandemic.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">All of these factors point to a situation where the current spending levels propping up the economy are unsustainable. Fannie Mae predicts that\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/what-the-consumer-is-telling-us-about-the-economy\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">consumer spending<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0will go down in 2024, reinstating a more \u2018\u2018normal\u2019\u2019 relationship between spending and income.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Therefore, Fannie Mae thinks GDP will decline 0.4% on a Q4\/Q4 basis in 2024, although the negative figure is expected to result from the timing of the year-end report in the fourth quarter. It\u2019s not indicative of a \u2018\u2018deeper economic downturn.\u2019\u2019\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The good news in Fannie Mae\u2019s forecast is that the recession, if it does happen, will be very mild and won\u2019t last into 2025, when the economy is expected to rebound, with a projected GDP of 1.6% for the year as a whole.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Anyone who\u2019s read economic forecasts will know that labor market trends are a robust indicator of where the economy is headed as a whole. As of October, as the report points out, the unemployment rate is steadily growing. It\u2019s currently at 3.9%, half a percentage up from April levels. Both initial and continuing unemployment claims are rising, which could again indicate that we are entering a recession.\u00a0<\/span><\/p>\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What About Real Estate?<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Again, these are not alarming figures, which is good news for the economy in the long term. However, it\u2019s not such good news for the housing market. Paradoxically, these unemployment levels aren\u2019t quite high enough to make an immediate difference to interest rates.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">\u2018\u2018Given the unemployment rate is still below 4%, a premature easing of monetary policy would risk reanimating inflation, so we do not expect the Federal Reserve to be quick in cutting rates in coming months,\u2019\u2019 Fannie Mae\u2019s report says.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Needless to say, sustained high Fed rates translate into high mortgage rates that are hampering home sales. The Fannie Mae (FNMA\/OTCQB) Economic and Strategic Research (ESR) Group expects things to get worse before they get better: Home sales will bottom out in early 2024, per the ESR report.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">There is a silver lining in this forecast, however:\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/federal-reserve-to-lower-rates-six-times-says-ing-economics\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Interest rates will begin coming down in the second half of 2024<\/span><\/a><span data-preserver-spaces=\"true\">, and Fannie Mae expects them to average 6.8% by the end of the year. This will happen regardless of whether there is a recession or the much-hoped-for \u2018\u2018soft landing,\u2019\u2019 because the Fed\u2019s fiscal policies are largely working toward the desired goal of reduced inflation rates.\u00a0<\/span><\/p>\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Overall, it could be a lot worse. While the housing market is currently suffering from surging interest rates and supply constraints, it will improve eventually.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Doug Duncan, Fannie Mae senior vice president and chief economist, calls the results of the ESR report \u2018\u2018unsurprising,\u201d adding:\u00a0<\/span><\/p>\n<p><em><span data-preserver-spaces=\"true\">\u201cHousing has been and continues to be under serious\u00a0<\/span><\/em><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/on-the-market-145\" target=\"_blank\" rel=\"noopener\"><em><span data-preserver-spaces=\"true\">affordability pressure<\/span><\/em><\/a><em><span data-preserver-spaces=\"true\">, resulting in recessionary-level home sales activity. While many current owners with low mortgage rates will likely continue to be discouraged from listing their homes, we expect mortgage rates to trend modestly downward in 2024, which should help kick-start a gradual recovery in home sales into 2025.\u201d<\/span><\/em><\/p>\n<p><span data-preserver-spaces=\"true\">This isn\u2019t to say that home sales will return to anything near pre-pandemic levels. This level of sales recovery \u2018\u2019will likely take years,\u2019\u2019 according to Fannie Mae\u2019s experts. However, the worst will soon be behind the housing market: Fannie Mae forecasts that \u2018\u2019the bottom will be passed in 2024.\u2019\u2019\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Investors should take heart. The housing market is not heading off a cliff\u2014it\u2019s just nearing the bottom of a trough.<\/span><\/p>\n<div id=\"visibility-group-block_64dd56548a48e\" class=\"visibility-group  hidden\">\n<div id=\"hero-block_62df1a82bfc88\" class=\"first:mt-0 hero-block py-4    has-background has-theme-gold-light-background-color has-text-color has-theme-gold-color\">\n<div class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n<div class=\"relative z-30 w-full \">\n<main class=\"py-4\"><\/p>\n<p class=\"has-theme-gold-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Get the Best Funding<\/p>\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:16px\">Quickly find and compare investor-friendly lenders who specialize in your unique investing strategy. It\u2019s fast, free, and easier than ever!<\/p>\n<p><\/main>\n<\/div>\n<div class=\" first:mt-0 relative h-full lg:flex lg:items-center\">\n<img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  shadow-xl rounded-md hidden lg:block\" src=\"https:\/\/bpimg.biggerpockets.com\/https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Lender-Match.png\" alt=\"find a lender with lender match\" title=\"Fannie Mae Expects Home Sales to Bottom Out? Here's What the Latest Forecast Says 2\"\/>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"wp-block-group is-layout-constrained wp-block-group-is-layout-constrained\">\n<div class=\"wp-block-group__inner-container\">\n<div class=\"wp-block-group__inner-container\">\n<div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n<div class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n<div class=\"relative z-30 w-full \">\n<main class=\"py-4\"><\/p>\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n<p><\/main>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p class=\"italic\"><b>Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n<\/div>\n<\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.biggerpockets.com\/blog\/fannie-mae-predicts-housing-prices-will-bottom-out-in-2024\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In this article Fannie Mae is predicting a recession in 2024 in its latest\u00a0Economic Developments report. As a result, home sales are expected to bottom out next year before ultimately improving in 2025. A 2024 recession has been repeatedly predicted by think tanks, individual economists, and financial experts. Fannie Mae adds its own forecast to [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":10268,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"fifu_image_url":"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/12\/price-crashing-1024x517.jpg","fifu_image_alt":"","footnotes":""},"categories":[9],"tags":[],"class_list":["post-10267","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/10267","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/comments?post=10267"}],"version-history":[{"count":1,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/10267\/revisions"}],"predecessor-version":[{"id":10269,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/10267\/revisions\/10269"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media\/10268"}],"wp:attachment":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media?parent=10267"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/categories?post=10267"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/tags?post=10267"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}