The economy will be a little stronger in the second half of 2013 than the first half, with housing expected to act as a tailwind throughout the year and into 2014, economists at Fannie Mae said in releasing their latest forecast.
Recent housing indicators point to continued recovery, with a surge in multifamily construction pushing the annualized pace of total housing starts in March past the 1 million mark for the first time since mid-2008. The boom in multifamily construction is driven by the continuing decline in the homeownership rate, which dropped to 65 percent during the first quarter of 2013, the lowest rates since 1995.
While new-home sales are “showing signs of life,” sales of existing homes are “moving sideways,” Fannie Mae economists noted in a summary of recent economic events.
“Lean inventories, a declining share of distressed sales, and increased efforts to implement short sales and other foreclosure alternatives have helped boost home prices, which showed strengthening annual gains so far this year,” Fannie Mae economists said.
Fannie Mae’s affordability index, which looks at mortgage rates, family income and home prices, estimates that affordability peaked in 2012 but that homes will remain more affordable than during “normal” times through 2017. Source: fanniemae.com.