The government shutdown and debt ceiling standoffs appear to have had a “minimal effect” on the housing market and rising home prices may actually help cushion some of the debates’ impacts by raising household net worth, Fannie Mae economists said in a monthly outlook released today.
Now that the Federal Reserve has decided to postpone its plan to taper its bond-buying activity, the mortgage giant doesn’t expect an end to the stimulus until the second half of 2014. Consequently, the economists lowered their forecast for mortgage rates, now predicting they will rise to an average of 4.4 percent in the fourth quarter and to 5 percent a year from now. In another sign of optimism for the housing market, Fannie Mae economists upped their forecast for home sales this year and anticipate they will rise 10 percent compared to 2012, though they expect a likely pullback in sales in the fourth quarter.
Source: Fannie Mae