These days, there are fewer existing homes for sale and it’s helping to support price growth, according to a new commentary from Fannie Mae’s Economic and Strategic Research Group. The group releases an updated outlook each month covering what they expect from the housing market and overall economy in the days ahead. Their latest release addresses how the low inventory of homes for sale has kept prices strong even in the face of rising mortgage rates. “Housing prices continue to show stronger growth than what was previously expected given the suddenness and significant magnitude of mortgage rate increases,” Doug Duncan, Fannie Mae’s senior vice president and chief economist, says. “Housing’s performance is testimony to the strength of demographic-related demand in the face of Baby Boomers aging in place and Gen-Xers locking in historically low rates, both of which have helped keep housing supply at historically low levels.” Fannie Mae expects demographic factors to keep inventory low for the foreseeable future, which should help prevent sharp price declines in most markets. (source)
