The housing market is somewhat of a bright spot for the economy despite the U.S.'s continuous struggle with weaker exports and slowing global growth, the Fannie Mae Economic & Strategic Research Group reported Friday.
The macroeconomic picture in the U.S. continues to battle economic headwinds—namely a September jobs report that came in below expectations and an appreciating dollar which will pressure the already growing U.S. trade deficit, Fannie Mae said. Yet, housing remains in a fairly positive zone, considering all of the factors weighing it down.
The GSE research group noted that single-family and multifamily starts—as well as existing home sales—may have dropped in August, but new home sales reached a high during the same month and builder confidence rose in September.
The National Association of Home Builders/Wells Fargo Housing Market Index saw confidence in the new single-family home construction index rise one point to a level of 62 on a scale of 100, the highest reading since October of 2005, NAHB said in September. The same month, the association estimated that 1.1 million total housing starts will be recorded in the U.S. this year.
Fannie Mae’s economic update noted that expectations for future activity in housing remain unchanged, with home sales expected to rise nearly 8 percent in 2015 and another 4 percent in 2016.
In addition, projected mortgage originations for 2015 were raised higher in this month’s forecast.
“Despite recent headwinds, which likely will slow economic growth compared to the first half of 2015, we see positive trends for consumer spending and housing heading into the fourth quarter."
“Despite recent headwinds, which likely will slow economic growth compared to the first half of 2015, we see positive trends for consumer spending and housing heading into the fourth quarter,” said Fannie Mae Chief Economist Doug Duncan. “Strong home price gains should help drive an increase in household net worth again in the third quarter, and, combined with low gasoline prices and mortgage rates, should support strong consumer spending throughout the rest of the year.”
The mortgage market itself continues to battle regulatory changes—including the implementation of the TILA-RESPA Integrated Disclosure Rule—which caused wide swings in mortgage application activity in the week before and after its launch.
As MReport reported earlier this week, mortgage applications fell 27.6 percent from the previous period, according to Mortgage Bankers Association data.
The sudden drop is attributed to the roll-out of TRID on Oct. 3.