Predictions aren’t easy, but Fannie Mae’s Economic and Strategic Research Group makes them on a monthly basis. The group’s forecasts cover what they see ahead for the housing market and general economy. And, according to their October outlook, they expect inflation and consumer spending concerns to cause monetary policy to tighten in the months ahead. But what does that mean to the average home buyer or seller? Well, Fannie Mae says they should expect mortgage rates to rise slightly but remain low throughout 2022. The ESR Group also expects home price growth to decelerate somewhat from the double-digit spikes seen this year. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says overall, we shouldn’t expect major changes. “Even a modest tightening of monetary policy would of course impact housing, but we expect the effects to be largely muted given current market conditions,” Duncan said. “Mortgage rates may rise in response to the tighter environment, but we expect the severe shortage of homes for sale to remain the primary driver of strong house price appreciation through at least 2022, limiting interest rate effects on home sales and home prices.” (source)
Forecast Sees Low Rates, Slower Prices In 2022
