Strong demand for housing pushed home builder optimism higher this month despite continued supply chain disruptions. The NAHB Housing Market Index rose four points this month to 80 for the newly-built single-family home sector. Within the report, it showed that current sales conditions, sales expectations and the measure to chart traffic of prospective buyers all increased. “Although demand and home sales remain strong, builders continue to grapple with ongoing supply chain disruptions and labor shortages that are delaying completion times and putting upward pressure on building material and home prices,” said NAHB Chairman Chuck Fowke.
Fannie Mae released its October 2021 commentary saying economic growth is to be again be revised lower due to supply chain and inflation concerns. Also, mortgage rates are expected to rise slightly in 2022 as Fed gradually removes monetary accommodation. Gross Domestic Product for 2021 is expected to rise 4.9%, down from its previous forecast of 5.4%. On the rate front, mortgage rates are forecasted to average 3.3% in 2022, up from last month’s projection of 3.1 percent due in part to increased inflation expectations and a projected tightening of monetary policy. “While we still view the supply chain disruptions and, to a lesser extent, labor market tightness as largely transitory, we now expect both to last even longer than we’d previously forecast – and also likely longer than the Federal Reserve anticipated,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist.
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