The housing market is in a holding pattern, according to the latest forecast from Fannie Mae’s Economic and Strategic Research Group. Market conditions are improving – but slowly. As a result, home buyers remain hesitant even though price increases have calmed and there are more homes for sale. Mark Palim, Fannie Mae’s senior vice president and chief economist, says market conditions aren’t likely to change much this year but there is a silver lining. “Due to lock-in effect and affordability constraints, we currently expect another year of sluggish existing home sales,” Palim said. “A silver lining for affordability is that we also anticipate income growth will outpace both home price and rent growth this year – and in many markets, new homes are now priced competitively with existing homes and are far more available.” The group expects home price increases will continue to slow this year and mortgage rates will fall, though the decline will be less than previously expected. (source)
