With economic growth expected to continue improving, 2015 should looks promising for the housing market, according to Fannie Mae’s economic and strategic research group.
Home sales are expected to grow by around 6% in 2015, the Fannie Mae team forecasted in a press release Thursday. Economic growth is currently forecast to increase to 2.9% in 2015, up from 2.5% the year prior, as an improving job market and lower gasoline prices to help nudge consumer spending upward throughout the upcoming year.
“Our forecast calls for a number of factors, including strong hiring and income growth, stabilized housing affordability, and modestly easing lending standards, to translate into improving housing demand throughout the year,” said Fannie Mae Chief Economist Doug Duncan in the Feb. 26 announcement.
The Fannie Mae research team said it expected the Federal Reserve to raise short-term interest rates this year, although a weak global economy should mute any rise in long-term rates.
And while total single-family mortgage debt should not budge much in 2015, Duncan said total single-family mortgage production should rise to roughly $1.2 trillion. In January, Freddie Mac also projected a $1.2 trillion origination market.