It’s a ‘tale of two housing markets’ with buyers and sellers at opposite ends, Fannie Mae CEO says

1 min read

PHILADELPHIA — The U.S. housing market is pushing buyers and sellers to opposite ends, as one group struggles with affordability while the other is locked into low rates.

“It’s a tale of two markets,” Priscilla Almodovar, chief executive of Fannie Mae, told MarketWatch in an interview on the sidelines of the Mortgage Bankers’ Association’s annual conference in Philadelphia. 

“Homeowners are in good shape because they probably have a lot of equity in their homes. They probably have a mortgage that’s 2%, 3%, 4%,” she explained, but are constrained by a “lock-in effect of not giving up that mortgage.”

Also see: Feds make it easier for home buyers to buy houses with accessory dwelling units

Roughly 92% of U.S. homeowners who have mortgages have a rate below 6%, according to a June analysis by Redfin. But as the 30-year mortgage rate inches closer to 8%, homeowners may have little interest in selling their homes, since they may have to buy another with a higher interest rate. 

On the flip side, buyers are also contending with mortgage rates at the highest level in 23 years, and are dealing with low inventory due to homeowners not selling. Inventory of homes for sale shrank by 4% in September as compared to the same time last year, according to

The median sales price for an existing home was $407,100 as of August, up 3.9% from the prior year, according to the National Association of Realtors.

Fannie Mae expects mortgage rates to stay in the 7% range through most of 2024, before ending next year at 6.7%, according to its latest forecast.

“We expect the higher-mortgage-rate environment to continue to dampen housing activity and further complicate housing affordability into 2024,” Doug Duncan, chief economist and senior vice president at Fannie Mae, said in a statement. 

Read more: Mortgage bankers expect the 30-year rate to drop to 6.1% by the end of 2024

Read the full article here

Leave a Reply

Your email address will not be published.

Previous Story

US retail sales rise 0.7% in September despite off-peak season

Next Story

Opinion: Stocks and homes are still pricey because buyers think inflation will stay high

Latest from Finance