The continuing shortage of homes shows no signs of easing, and the dearth of existing homes for sale is driving a resurgence of home-price growth and supporting increased construction of new homes. In its July commentary, Fannie Mae’s Economic & Strategic Research (ESR) group revealed that that ongoing lack of inventory exceeded ESR's expectations, and it upgraded its single-family housing starts forecast accordingly, HousingWire reports.
Homebuilders continue to use mortgage rate buydowns to help drive sales, and with many construction input prices — including that of lumber, which is lower than a year ago — builders continue to have ample margin to offer incentives, Fannie Mae pointed out.
The ESR group in return upgraded its single-family housing starts forecast to 896,000 units for 2023 and to 890,000 units for 2024, up from 824,000 and 845,000, respectively.
The combination of an upward revision to the home price outlook and greater expected home construction has also led to a slight upgrade in Fannie Mae’s forecast of 2023 mortgage originations.
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