Citing constraints on credit and tight inventories, Freddie Mac and Fannie Mae have trimmed their housing expectations for this year.
Fannie Mae’s Chief Economist Doug Duncan says he expects new-home construction to reach 1.5 million housing units this year, a drop of 50,000 from Fannie’s forecast earlier this year.
“We have downgraded our housing forecast slightly due to a lackluster sales picture, but the recent loss of momentum is likely a temporary one,” Duncan says.
Freddie Mac also has trimmed its housing forecast recently, cutting its forecast for home sales to 5.5 million from the earlier 5.6 million estimate for this year.
“Tight inventory may pose a significant challenge for home buyers in many markets across the country, which may result in higher home prices and sales being lower than expected,” says Frank Nothaft, Freddie Mac’s chief economist.
Source: “Fannie, Freddie Cut Housing-Market Forecasts for 2014,” The Wall Street Journal (April 21, 2014)