The Federal National Mortgage Association, commonly known as Fannie Mae, today (8-19-21) revised their forecast for 2021 real gross domestic product (GDP) lower, from 7.0% to 6.3% on a Q4/Q4 basis, with a partial offsetting upgrade to the 2022 expected growth rate to 3.2% from 2.8%. Fannie Mae says the lower projected pace is due in part to a weaker-than-anticipated Q2 2021 GDP figure and in part to a modestly weaker second half outlook.
Fannie Mae also downgraded their home sales forecast for the second half of 2021, driven by a weaker outlook for the sale of new homes, largely due to continued supply constraints impacting homebuilders. This was partially offset by a modest upward revision to existing home sales based on incoming data and the recent decline in mortgage rates. Fannie Mae now expects 2021 total home sales to increase 3.1% from 2020, compared to 3.8% percent in their July forecast.
For new construction, they are forecasting 2021 housing starts to be 16.9% higher than in 2020, down from a 17.7% gain previously. A modest downward revision to single-family starts was partially offset by an upgrade to multifamily construction.
Largely due to a lower interest rate outlook, the 2021 mortgage originations forecast was upgraded to $4.4 trillion, up from $4.2 trillion. Refinance originations accounted for most of the upgrade. Fannie Mae forecast of 2022 originations ticked upward to $3.3 trillion from a prior $3.2 trillion.
FEA compiles the Wood Markets News from various 3rd party sources to provide readers with the latest news impacting forest product markets. Opinions or views expressed in these articles do not necessarily represent those of FEA.
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