Fannie Mae’s Economic and Strategic Research Group releases a forecast each month detailing their expectations for the economy and housing market. According to the group’s most recent release, there are a number of signs that the once hot housing market is beginning to cool off, including a rising number of active listings, fewer sales, and an increasing number of listings that have undergone a price cut. But despite several signs that things are beginning to slow down, there are other indicators that have yet to show any meaningful change. Home prices, for one. “Home price changes tend to lag changes in home sales as prices tend to be ‘sticky,’” the group says. “Sellers are often reluctant to cut their asking price, and buyers’ expectations are based on recent comparable sales.” In other words, despite rising inventory and fewer buyers, home prices have yet to respond to changing conditions. Still, Fannie Mae expects they will decelerate as the year goes on. They also expect buyer demand to cool further. But while the market’s expected to continue to loosen through the end of the year, the group expects the changes will be gradual as we head into 2023. (source)
