Monday, December 5, 2022 / by Adam Donaldson-Moxley
Home sales will only get worse next year before rebounding in 2024
The forecast for the housing market is expected to get gloomier next year before rebounding to 2022 levels in 2024. Fannie Mae‘s Economic and Strategic Research (ESR) Group forecasts single-family home sales to post 5.67 million in 2022 before dropping to 4.42 million in 2023 and then climbing to 5.25 million in 2024.
The latest forecast also projects that total mortgage origination activity is slightly increased at $2.34 trillion in 2022. The mortgage market is projected to slip further, however, to $1.74 trillion in 2023 before climbing to $2.11 trillion the following year, according to the government-sponsored enterprise.
The full effects of rate increases on home sales have yet to be felt, Fannie Mae’s November commentary said. With rates at escalated levels, it is affecting home buyers facing affordability challenges.
“From our perspective, the good news is that demographics remain favorable for housing, so the sector appears well-positioned to help lead the economy out of what we expect will be a brief recession,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.