On the radar in 2023 for most of those in the housing and mortgage business is how the market will hold up after borrowing costs and housing prices soared by mid-2022.
A recent forecast from Fannie Mae showed home sales in 2023 are forecasted to total 4.57 million units from the previous read of 4.42 million. Sales in 2022 are expected at 5.27 million units. Fannie sees a rebound in 2024 to follow thereafter, with total sales rising 14.7% to 5.24 million units from 5.25 million. Additionally, they expect economic growth to return and mortgage rates to stabilize. The outlook for overall mortgage originations for the three-year period from 2022 through 2024 is essentially unchanged from a recent forecast at $2.35 trillion, $1.70 trillion, and $2.11 trillion, respectively.
Fannie Mae’s Senior Vice President and Chief Economist, Doug Duncan said, “We expect housing to continue to slow, even though mortgage rates have come down recently. 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. Of course, refinancing is still not practical for the vast majority of current mortgage holders, which we expect will also continue to constrain mortgage origination activity.”
Industry expert Rob Chrisman recently wrote,” Keep in mind that people need a place to live, and usually financing to accomplish that, and someone has to give them those loans!” So true, households form every day and there will always be a need for shelter either in renting or owning.
Source: Mortgage Market Guide
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