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Housing Outlook Stays Positive Despite Challenges

Each month, Fannie Mae's Economic and Strategic Research Group releases an outlook forecasting what they think is ahead for the economy and housing market. In November, their outlook is largely positive, with economic growth projected to remain fairly consistent and housing activity continuing its momentum into next year. Doug Duncan, Fannie Mae's senior vice president and chief economist, doesn't see any major changes ahead. “Economic growth continues to slow, but not precipitously; and as rates have not yet reacted strongly, housing and mortgage activity remain very strong,” Duncan said. According to the release, the group has revised upward their expectation for total home sales this year and believes the current supply-side issues holding home building back will begin to ease in the months ahead. In fact, they expect new-home construction to rise nearly 5 percent next year, leading to a 13.9 percent increase in sales of new homes. And while they do expect mortgage rates to rise, their forecast is only for slight increases in 2022 and 2023, which means rates will remain low by historical standards.