Fannie Mae economists are predicting incremental steps forward in the housing sector for 2012, albeit refinances will fall. "The second half of the year should outpace the first six months in terms of growth, though fiscal policy and political uncertainty in Washington will likely drive consumer and business activity", the mortgage giant states.
According to Chief Economist Doug Duncan positive consumer activity and challenges in housing and the global economy will equate to moderate growth for the year.
"We're entering 2012 with decent momentum, especially on the employment side, which is fostering positive household and consumer behavior," Duncan said, "Unfortunately, we expect this momentum to slow as we move through the first half of the year."
Total home sales are predicted to increase 3.5% to about 4.74 million in 2012 from 2011 with another 5% gain in 2013 to nearly 5 million, according to the report released last Friday. New home sales are forecasted to jump 10.4% for 2012.
According to the forecast, the Federal Housing Finance Agency home sales price index, excluding refinances, could dip 1.1% for 2012 from a year before. Many Economists had predicted the 2011 index would finish 4.6% lower than 2010.