Housing Market Remains Resilient Despite Looming Fiscal Cliff
Economic activity turned sluggish in the fourth quarter as uncertainties loom over the fiscal cliff, restraining consumer and business confidence, according to Fannie Mae’s Economic & Strategic Research Group. Still, the housing market is staying resilient, researchers note.
“With data pointing to soft economic conditions and the fiscal policy debate hanging in the balance, we expect growth in the current quarter to moderate from the pace seen last quarter,” says Doug Duncan, Fannie Mae’s chief economist. “On the bright side, the housing market has stayed resilient and continues to show signs of a strong, sustained recovery. Mortgage rates remain close to historic lows and home sales and home prices are trending positively. For the first time since 2005, residential investment is poised to contribute to annual economic growth this year, albeit on a small scale.”
Housing and mortgage activity is expected to gain momentum in the new year, Duncan says. Fannie Mae forecasts that home sales will increase by 8 percent in 2013, after a projected 10 percent increase this year.
“Although home prices have dipped during the seasonally weak fall and winter seasons, year-over-year gains have strengthened significantly above 2011 levels, and we expect that trend to continue in coming years,” Duncan says.
Source: Realtor Mag