Highlight text to annotate itX
Fannie Mae is out with its new forecast for housing in 2015.
It's okay I guess.
Fannie Mae chief economist Doug Duncan is here to talk about it.
Doug, you're forecasting a 5.8% increase in home sales for 2015.
That sounds kinda disappointing.
How should we feel about that?
Yeah, our view is that housing is, going to be dragged up by the economy.
That is, in this expansion, housing has been atypical in that it.
Usually leads in economic expansion.
. Right. . This time it's been it's dragged.so it's a better year than 2014
and 2013 but it's not the breakout year that some people are forecasting.
When, when are we going to get that breakout year?
I think it's when the millennials decide that there
incomes are secure enough and that.
mobility, in their mind, is less of an issue and they come onto the scene.
The Boomers have peaked and they're moving off the scene.
The Gen-xer's are a small smaller group and they're actually what's
driving the move up market if you look at average loan size.
But there are smaller population groups that were in kind of a holding
pattern until the Gen Xers come on the scene.
Just briefly, how would you define that break out year?
How do we know when it arrives?
10% increase in sales, something like that?
Yeah. I would say we'll be looking that.
We're, I tend to look at the construction side of things.
Our view is that when construction.
Is aligned with our demographics.
We would be building between one and a, 1.5 and 1.6 million housing units,
whether it's multi-family or single-family on an annual basis.
We think this year.
We'll build about 1.15 million.
So still quite aways from normal.
So let me ask you about buyers.
It has been a great time to buy a house with one caveat.
So many people can't qualify for a mortgage.
They can't get the the loan to buy the house.
So, is that going to get better in 2015?
Well what we're saying today demand weakens trumps credit tightness.
That means it's not that credit is not tighter.
It definitely is tighter.
But people are just saying, I wanna make sure that my income is growing and
that my employment is stable before I make the largest financial commitment
that I typically will make during the course of my lifetime.
You mention, you mention falling gas prices in your forecast.
How big a deal is that for buyers?
I mean that's a big savings to them, but
you know, maybe a 1,000 bucks a year extra in their pocket.
Will that actually make a difference in terms of people deciding whether to
buy a home?
I think it does two things.
One is it gives them some after tax increase in income,
which they can apply to paying down other obligations.
And also to increase current consumption.
But they would in order for that to reflect on housing,
they'd have to believe that was a long term change in the,
in the cost of gas and I don't think they're there yet.
If you look at today's GDP release, you'll see consumption is up.
Right. So there's no question it's having some impact but
that may be short term.
In your forecasting interest rates law its mortgage rates to stay.
About the same as where they as they are right now for most of 2015, right?
That's right. We, we think the fed is low for long.
They'll, if they move to increase rates, it'll be short-term rates and
that will be no sooner than September and maybe even later than that.
So, I, just to wrap up,
would you say that this is a great time to buy a house?
It seems like it probably is, right?
I, If you're comfortable with, with your.
Job and your income and you've got a family budget and it fits.
There's probably no better time than today.
Thanks for that Doug Duncan.
Tell us what you think?
Is it a good time to buy a house?
Are you willing to take that risk?
Let us know in the comments below or on Facebook and Twitter.