For April, 2014

Fannie, Freddie cut housing-market forecasts for 2014


On the heels of a choppy first quarter, federally controlled mortgage-finance giants Fannie Mae and Freddie Mac have cut their forecasts for the U.S. housing market’s performance in 2014.

Doug Duncan, Fannie’s chief economist, said Monday that he now expects builders to start construction on 1.05 million housing units this year, down 50,000 from Fannie’s forecast earlier this year. He cited constraints on credit and labor.

Last week, Freddie cut its forecast for home sales in 2014 to 5.5 million from a prior estimate of 5.6 million.

“Tight inventory may pose a significant challenge for home buyers in many markets across the country, which may result in higher home prices and sales being lower than expected,” said Frank Nothaft, Freddie’s  chief economist.

Looking forward, projects and purchases delayed by bad weather could pop up in coming housing reports. While dropping affordability will continue to trim some sales, mortgage rates do remain relatively low, home-price growth is expected to slow down and some banks are easing standards for loans.

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