Fannie Mae economists have downgraded their housing outlook after a weak end to the second quarter, and they say that near-term indicators are suggesting only a minor improvement in the second half of the year.
“The impact on mortgage rates from the market’s expectation that the Federal Reserve would soon start tapering their securities purchases, combined to some degree with the weather effect in the first half of 2014, led to very little seasonal growth in housing,” says Doug Duncan, Fannie Mae’s chief economist. “In the first six months of the year, total sales have run below last year’s pace.”
Also, Duncan notes that “on the demand side, there appears to be a conservatism among consumers and their willingness to take on big-ticket purchases, such as homes.”
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