Home sales forecasted to decline 18.1% to 5.64 million units this year from 2021.

The forecast for the housing market in 2023 gets worse by the month, with the latest report predicting a million-plus decline in existing home sales and just $1.3 trillion in mortgage origination volume. Fannie Mae‘s Economic and Strategic Research (ESR) Group now forecasts total single-family home sales to decline 18.1% to 5.64 million units this year from 2021, a further downward revision from September’s projected 17.2% drop. The latest forecast also projects total mortgage origination activity at $1.6 trillion in 2022, a $78 billion decline from last month’s forecast. The mortgage market is projected to slip further to $1.3 trillion in 2023, according to the government-sponsored enterprise. “Over the last few weeks, markets have increasingly and perhaps reluctantly reflected the resolve of the Fed to lower inflation via rapid tightening of monetary policy,” said Doug Duncan, Fannie Mae’s senior vice president and chief economist. “The slowing effect on the housing market of the higher mortgage rate environment has been largely predictable, and home prices appear to have already begun trending downward.” Looking ahead to the full year 2023, Fannie Mae expects an average home price decline of 1.5%. “Given the ongoing tension between potential homebuyers and home-sellers at the moment, we believe the pace of sales is likely to slow even further, too,” Duncan added.

Source: HousingWire