Housing market forecast steady despite shutdown
Posted on Friday, October 18, 2013 at 10:36:51 AM
Even while the partial government shutdown occupied the minds of many Americans during the first two weeks of October, the forecast for the housing market remained unchanged.
The budget impasse resulted in federal organizations being closed or severely limited. Residential financing became more difficult to acquire and consumer sentiment dropped. Despite the situation, Fannie Mae's Economic and Strategic Research Group reported that the forecast remained mostly unchanged.
"On the bright side, these fiscal policy issues appear to have had only minimal effect on the housing market to date, which continues to improve overall," said Doug Duncan, chief economist for Fannie Mae. "Notably, the rapid appreciation of home prices during the past year has contributed significantly to household net worth gains and may help to cushion some of the fallout from the fiscal policy debate."
On the contrary, one expert did warn of possibly dangerous times ahead, according to Reuters. Dallas Federal Reserve president Richard Fisher told reporters that the current housing market is trending toward a bubble. He called for caution, and pointed to rising home prices and the U.S. Federal Reserve's policies as contributing factors to the trend.
However, based on current data, Fannie Mae predicted that the full-year economic and housing forecast is expected to reach 1.9 percent, only barely below the original estimate of 2 percent.
Ideally, those interested in residential financing will find the market has become more accommodating since the shutdown has ended.