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Outlook Sees Affordability Gains In The Future

Fannie Mae's first forecast for 2024 should be encouraging for anyone considering buying a home this year. That's because its Economic and Strategic Research Group – which releases a monthly outlook for the housing market and overall economy – sees affordability conditions easing, with lower mortgage rates and slower home-price increases in the months ahead. In fact, the group says prices will rise just 3.2 percent this year, compared to 7.1 percent in 2023. Doug Duncan, Fannie Mae's senior vice president and chief economist, says potential rate cuts should also help home buyers. “In 2024, we expect home sales and mortgage origination activity to begin a gradual recovery in the presence of a slow-growing economy,” Duncan said. “Inflation's decline and the resultant Fed pivot to signaling future rate cuts lead us to believe that home sales and mortgage originations likely bottomed out in the second half of 2023 and that a gradual improvement is now underway.” Duncan believes this year will be better for buyers, with the existing-home market beginning to normalize and more new home construction helping to add to the inventory of homes for sale.

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