The new year is coming in hot, and Fannie Mae has adjusted its 2020 housing forecast to reflect gains from a strong labor market and increased consumer spending. By 2021, the financial group expects builders to add one million new homes. Single-family starts are accelerating, and Fannie Mae doesn’t think that is going to slow down anytime soon, especially with demand high and inventory strikingly low.
Strong reads on the economy have researchers at mortgage giant Fannie Mae revising their 2020 housing forecast much higher.
Fannie Mae’s Economic and Strategic Research Group predicts builders will expand production more than previously expected, due to a strong labor market and robust consumer spending. Low mortgage rates will also help.
After increasing just over 1% annually this year, growth in single-family housing starts will accelerate to 10% during 2020 and top 1 million new homes in 2021, the group predicts. That would mark a post-recession high but is still far below the annual peak of about 1.7 million single-family starts in 2005 and the 1.2 million annual pace experienced in the late ’90s.
Single-family housing starts have been improving steadily since May, and building permits, an indicator of future construction, are also trending higher.
