Lending constraints to cause US housing market to lag behind economic growth, which is expected to average 3.1% over next six quarters, bank economists predict
June 16, 2014
( National Mortgage News)
– Economic growth will rebound 3.8% in the second quarter and average 3.1% over the next six quarters, but the housing market won't be as strong due to constraints on lending, according to bank economists.
"We expect the housing market is going to recover from its recent 'soft patch,'" said Christopher Low, chief economist at First Horizon National Corp. Still, the forecast shows 2014 existing home sales will be slightly below the 2013 rate. Low says that it's "tougher" to a get mortgage today because of the new qualified mortgage rule. "The average FICO scores for people getting mortgages are higher this year than last year as a result of the new regulation," he said at an ABA press briefing.
The ABA Economic Advisory Committee that Low chairs is forecasting home sales will bounce back in the current quarter from the first quarter dip, but not exceed the sales rate of the fourth quarter of 2013.
Their consensus forecast calls for existing home sales to remain relatively flat-rising from a 4.9 million seasonally adjusted annual rate in 2014 to a 5.1 million rate in 2015. If that forecast is correct, 2015 sales will match the existing sales rate of 2013. The economists are more optimistic when it comes to new home sales. Overall, they expect new home sales to rise 7.4% to a 463,000 seasonally adjusted annual rate in 2014.
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