Fannie Mae Predicts Housing Market for 2013

February 1, 2013

We have seen significant improvements in the luxury waterfront real estate market over the past year from Miami Beach to Palm Beach. Oceanfront condos and estate sales have gone up considerably and sale prices have increased as well. It isn’t always easy to predict the future of the real estate market but things are definitely looking up.           

Federal National Mortgage Association, Fannie Mae recently published their predictions for what 2013 and 2014 may look like in a report they call “Transition to Normal”

Fannie Mae Predictions for the Housing Market in 2013 and 2014      

Mortgage rates: Fannie Mae believes that interest rates will remain historically low. The report says that interest rates may go up to 4.2 percent by the end of 2014, which is still considerably low.  

FHA Loans: Fannie Mae believes that FHA loans will become more expensive due to additional costs.

Refinancing: The prediction is that 2013 will be the first of several transitional years and finance markets will shift to more of a ‘normal’ balance between refinance and purchase-related activity.

Foreclosures: Fannie Mae believes that foreclosures will decline because alternatives to foreclosures will be pursued.

Housing starts (the number of newly constructed single-family homes, condominiums and townhouses): Fannie Mae predicts that the construction of new homes will increase by 23 percent, which is 60 percent higher than the record low of 2010.

Mortgage originations: Fannie Mae predicts that mortgage originations will increase to six hundred and forty two billion from a forecast of five hundred and eighteen billion of 2012.

Source: Fannie Mae Report