Housing Turns Positive After Tough Winter

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Because economic and housing market activity was slower than expected during the first quarter of the year, Fannie Mae’s Economic and Strategic Research Group has lowered their expectations for total home sales this year. Doug Duncan, Fannie Mae’s chief economist, said they expect total home sales in 2014 to be about 2 percent lower than in 2013, with new home sales advancing somewhere in the 12 to 15 percent range and existing home sales declining year-over-year. But the adjustment doesn’t reflect continuing weakness in the market. In fact, more recent housing indicators show the market improving, with home price gains contributing to consumers’ household wealth. After a slow winter, home sales and inventory have improved, price increases have begun to moderate, and mortgage rates have declined. Still, any gains made in the second half of the year will likely be making up for lost ground rather than contributing to year-over-year gains. More here.