Fannie Mae economists now expect that when the final numbers are in, sales of new and existing homes will grow by 4.7%, to 6.8M.
While demand for homes remains strong, there’s no sign of relief on the supply side, and listing shortages are expected to continue to drive up home prices and dent sales of existing homes in 2022.
Mortgage rates have been on the rise as the Federal Reserve prepares to start withdrawing the support it’s provided to mortgage markets later this year. But Fannie Mae economists aren’t anticipating a rapid runup in rates, and see listing shortages and rising prices as the greater impediment to home sales.
An unexpected jump in August pending sales — combined with recent strength in mortgage applications data, and a reassessment of the number of homes purchased without a mortgage — drove the more optimistic projections for 2021 home sales.
Fannie Mae economists now expect that when the final numbers are in, sales of new and existing homes will grow by 4.7 percent this year, to 6.768 million. That’s up from a projected 2021 growth of 3.3 percent in September’s forecast.
That’s despite the fact that new home sales are expected to drop by 3.8 percent this year, to 791,000 homes, as builders continue to cope with shortages of materials and skilled labor. The slowdown in new home sales will be more than offset by sales of existing homes, which are now projected to grow by 6 percent in 2021, to 5.977 million.
Next year is expected to be a different story, however. Sales of new homes are expected to soar by 13 percent in 2022, to 893,000, as builders start to bring more inventory to market. But Fannie Mae economists see existing home sales falling by 5.6 percent next year, to 5.642 million units, with continued home price appreciation curbing demand.
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