MReport January 2021

TheMReport — News and strategies for the evolving mortgage marketplace.

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60 | M REPORT SECONDARY MARKET THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T M any factors have contributed to Fannie Mae's updated predic- tion for end-of-year and 2021 growth. Stronger-than-expected data coming in, positive vaccine developments, and increased talks of additional stimulus have helped keep the economy mov- ing ahead. Originally forecasted at negative 2.5%, full-year growth is now expected to be nega- tive 2.2%, a .3% increase. And the 2021 forecast has gone from 3.3% growth to 4.5% growth, a healthy 1.2% increase. Fannie Mae has even gone as far as predict that 2022 will experience 3.2% growth, which has increased .2% since November's original prediction. As for the housing market, October was stronger than predicted, but things are slowing down. However, at the time of this writing, Q 4 2020 is forecast- ed to hit 7.6 million as opposed to the original prediction of 7.16 million. Inventory in the housing market continues to be an issue, but Q1 2021 should still be stronger than Q1 2020, up 12.1%. And rapid appreciation has made homes less affordable. In fact, the CoreLogic National Home Price Index reports home prices have jumped 7.3% between October 2019 and October 2020. The demand for new builds continues to climb, as well. Single-family new construction rose 6.4% in October, the highest rate since 2007. However, Fannie Mae reports this pace is unsus- tainable and should taper off by spring. As for the current trend of people moving to more spacious areas, specifically suburban loca- tions, whether or not it's fueled by Covid-19 remains to be seen. But regardless, the trend doesn't appear to be slowing down any- time in the near future. All in all, the housing market has done well, despite the many problems caused by the pan- demic. And with recovery—both economic and for a more typical way of life—on the horizon, the housing market will continue to do well. New Predictions COVID-19 vaccine and economic shifts could boost housing market.

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