Fannie Mae Chief Economist on Housing Market Outlook: A Cautious Optimism

Douglas Duncan, Fannie Mae's chief economist, is cautiously optimistic about the housing market outlook for the remainder of 2023 and into 2024. He expects that home price growth will slow, but that home sales will remain relatively stable.

Duncan's optimism is based on a number of factors, including:

Fannie Mae Chief Economist on Housing Market Outlook: A Cautious Optimism

• Continued strong demand for housing: Demand for housing is expected to remain strong in the coming months, as the population grows and the economy continues to recover from the COVID-19 pandemic.

• Low unemployment: Unemployment is at a near-50-year low, which is giving consumers the confidence to buy homes.

• Low inventory: The inventory of homes for sale is at a near-record low, which is putting upward pressure on home prices.

However, Duncan also acknowledges that there are a number of challenges facing the housing market, including:

• Rising interest rates: The Federal Reserve is raising interest rates in an effort to combat inflation. This is making it more expensive for people to borrow money to buy homes.

• High inflation: Inflation is at a 40-year high. This is making it more difficult for people to afford the rising cost of housing.

• Shortage of homes for sale: The shortage of homes for sale is driving up prices and making it more difficult for buyers to find homes that meet their needs.

Despite these challenges, Duncan believes that the housing market will remain relatively stable in the coming months. He expects that home price growth will slow to around 5% in 2023 and 2024, down from 19.2% in 2022. He also expects that home sales will remain relatively stable, with around 6 million homes sold in both 2023 and 2024.

What does this mean for home buyers and sellers?

For home buyers, Duncan's outlook suggests that there is still a good opportunity to buy a home in the coming months. However, buyers should be prepared to act quickly and to be flexible with their criteria, as the inventory of homes for sale is low. Buyers should also be prepared for higher interest rates and inflation.

For home sellers, Duncan's outlook suggests that there is still a strong demand for homes. However, sellers should be realistic about their pricing expectations and should make sure that their homes are in good condition. Sellers should also work with a real estate agent to market their homes to potential buyers.

Conclusion

Fannie Mae Chief Economist Douglas Duncan is cautiously optimistic about the housing market outlook for the remainder of 2023 and into 2024. He expects that home price growth will slow, but that home sales will remain relatively stable.

Both home buyers and sellers should be aware of the challenges facing the housing market, such as rising interest rates, high inflation, and a shortage of homes for sale. However, Duncan's outlook suggests that there is still a good opportunity to buy or sell a home in the coming months.