By Peter Ricci
Rebounding home prices, record low mortgage rates and strong home sales are just some of many positive factors in the housing market heading into 2013, according to the latest Economic and Strategic Research report from Fannie Mae.
Describing the housing market as being on “firm footing,” Fannie Mae reported that housing’s indicators point to the industry not only heading towards a normal market, but also contributing to the economy in a positive way in 2013.
Fannie Mae Report – Many Positives in Housing Market
Fannie Mae’s Economic and Strategic Research reports are always quite extensive, and the GSE had numerous good things to point out about the housing market:
- New and existing-home sales have trended higher in recent months, and with supply dipping, housing inventory has balanced.
- Additionally, with housing supply the lowest its been in seven years, homebuilders are seeing their best opportunities since the downturn began in 2007, and there have been improvements in both the multifamily and single-family construction markets.
- Also, Fannie Mae said that household formation has shown noticeable improvement. Not only have lenders shown more initiative in implementing short sales and foreclosure alternatives, but serious delinquencies are also down from their peaks – and all those trends, of course, have aided home prices, which accelerated “substantially,” in the words of Fannie, in the second half of 2012.
Housing Market Predictions for 2013
All of those observations, naturally, led to Fannie Mae’s predictions for the housing market in 2013, and like those observations, they were quite positive in nature: housing starts, Fannie predicts, will increase 23 percent in 2013, and will be more than 60 percent above 2010’s low; similarly, annual household growth will be 1.37 million in the second half of the decade.
Fannie also predicted good things for the multifamily housing market in a separate report. In 2012, Fannie reported, 138,000 rental units were absorbed by consumers; though down from 170,000 units in 2011, Fannie said 2012 still represented healthy demand for rental units, and the strong multifamily market did provide much-needed boosts to the property values in many metropolitan markets. For 2013, Fannie expects asking rents to increase by 2.0 to 2.5 percent.