For many Fannie Mae’s Economic and Strategic Research Group releases a monthly forecast detailing what lies ahead for the economy and housing market. Though their most recent release says the overall economy will slow this year, their outlook for the housing market is encouraging for potential home buyers and sellers. That’s because they see stability ahead.
Doug Duncan, Fannie Mae’s chief economist, says there are a number of factors that should make market conditions more favorable this year. On housing, the recent dip in mortgage rates to their lowest level in over a year, combined with wage gains and home price deceleration, supports our contention that home sales will stabilize in 2019, Duncan said. The greatest impediment to both sales and affordability continues to be on the supply side, as new inventory, particularly among existing homes, is being met quickly by strong demand as evidenced by the already thin months’ supply hitting a new one-year low.
In other words, conditions will be less volatile than they were last year but ultimately depend on how many homes are available for sale. If new home construction and listings can keep up with demand, it’ll help keep prices steady.