GSEs

As existing-home sales fall for the 12th consecutive month, Freddie Mac reports that the rise in rates to 6.50% has exacerbated affordability issues for homebuyers nationwide.

While unemployment and mortgage rates have both dropped recently, unsustainably high consumer spending and inflationary pressures are expected to push the economy into a recession during Q2 of 2023.

“Mortgage rates moved up for the second consecutive week,” said Sam Khater, Freddie Mac’s Chief Economist. “The economy is showing signs of resilience, mainly due to consumer spending, and rates are increasing.”

A new report from the American Enterprise Institute found multiple pitfalls in current governmental and GSE data and recommends that they turn their eye to individual appraisers to get a better picture of potential racial bias.

What caused the uptick in fixed mortgage rates, and what might it mean for the housing market in the months ahead?

“January’s HPSI results showed that consumer sentiment toward the housing market remains subdued by historical standards,” said Doug Duncan, Fannie Mae’s SVP and Chief Economist.

“Mortgage rates inched down again, with the 30-year fixed-rate down nearly a full point from November, when it peaked at just over 7%,” said Sam Khater, Freddie Mac’s Chief Economist.

Freddie Mac reports the fixed-rate mortgage has fallen to its lowest level since mid-September, as buyers begin to return to the market ahead of the spring homebuying season.

"In our view, the balance still suggests a modest recession, particularly if the Federal Reserve maintains its focus on labor market tightness,” said Doug Duncan, SVP and Chief Economist for Fannie Mae.

Fannie Mae’s Jake Williamson and Appraisal Institute President Craig Steinley share their perspective with MReport about how the industry is working to improve the appraisal process in 2023.