March 15, 2019
Fannie Mae’s Predictions on the Housing Market Through 2019-2020
In the January 2019 Economic Outlook released by Fannie Mae’s Economic and Strategic Research Group (which includes its Economic Developments Commentary, Economic Forecast, Housing Forecast, and Multifamily Market Commentary), the Group has predicted that America’s economic outlook is likely to go through a slowdown through 2019—falling to a growth pace of 2.2 percent, down from 2018’s estimation of a 3.1 percent pace of growth. This reflects a decreased impact of boost in average home income from the Tax Cuts and Jobs Act, the effects of the protracted government shutdown, and the potential for a volatile stock market, which may depress the willingness of the average consumer to spend their hard-earned money—which was the primary driver of 2018’s economy.
However, there is good news, too: the labor market is likely to remain strong, despite job growth slowing to 1 percent nationwide (yet with key Topouzis & Associates, P.C. Florida service areas of Orlando, Jacksonville, and Tampa seeing probable higher job growth rates in the range of 2-3 percent). Moreover, the housing market will probably go through some stabilization that will permit potential homebuyers to recover from the rate whiplash that occurred through 2018.
Also, the building of multifamily housing is expected to peak in the coming year—whereas 381,000 apartment units were built in 2018, the Group expects 453,000 apartments to be completed in 2019.
The Economic and Strategic Research Group’s predictions place heavy weight upon the potential actions that may be taken by the Fed with regard to interest rates. Announcements of late indicate the Fed may make only one rate increase over the course of 2019. This relaxing of rate hike frequency, combined with lower inflationary pressure and financial conditions that will continue to tighten, add to the sense that the housing market will stabilize through the year. This should, in turn, improve both housing affordability and the confidence of homebuyers.
Whether the housing market is stable or volatile, we here at Topouzis & Associates, P.C. do everything we can to be absolutely sure our clients are conveying and purchasing property title clear of judgments and defects. And, yes, we help our clients put into place a good policy of title insurance to make certain they don’t get surprised by any nasty lurking issues with a property. Contact us if you’d like us to do this for you.