08/23/2024 | Press release | Distributed by Public on 08/23/2024 12:12
Helping lenders serve homebuyers and homeowners with affordable mortgages
Financing for quality, affordable rental housing in every market, every day
Reducing risk and enhancing housing finance liquidity
All Resources to Manage Financial Uncertainty
All Resources for Recovering from a Disaster
Recovery Assistance for Homeowners
Recovery Assistance for Renters
Key Takeaways:
The minutes from the FOMC's July meeting show that many FOMC participants were in favor of a 25bps rate cut at the July meeting if the question had been raised. Given the encouraging inflation reports since the meeting, along with a continued rise in the unemployment rate according to the July labor report, financial markets are placing a high likelihood of a cut in September, aligning with our own view. The details of the August labor report will add clarity to the likely magnitude of the September decision.
In housing, both new and existing home sales rose in July, with new home sales rising sharply and existing home sales rising slightly to just a bit below what we had anticipated. Combined with mortgage rates pulling back in recent weeks, this suggests some upside risk to our new home sales forecast, though existing sales are expected to remain sluggish. Inventories of homes for-sale continue to rise, however, with the combined "for-sale" inventories of new and existing homes now back to levels last seen in mid-2020. While we continue to expect a solid pace of new single-family housing starts over the near term, as builders have shown a willingness to use concessions to drive sales, near-term starts are likely to remain comparatively soft relative to the pace of sales due to the growing inventories of completed homes available for sale.
Richard Goyette
Economic and Strategic Research Group
August 23, 2024
Opinions, analyses, estimates, forecasts, beliefs, and other views of Fannie Mae's Economic & Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, beliefs, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, beliefs, and other views published by the ESR Group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.