Fannie Mae's Economic and Strategic Research Group has downgraded home sales forecasts for 2024 and 2025, citing that lower mortgage rates aren't sufficient to boost sales due to persistent high home prices.
Even though lower mortgage rates typically encourage buying, home sales are sluggish since a majority of potential buyers find current affordability still too challenging.
Only 17% of consumers believe it’s a good time to buy a home, indicating significant reluctance among potential buyers despite lower mortgage rates.
Although demand for refinances is expected to stabilize origination volumes, the overall outlook for purchase originations remains subdued due to ongoing affordability issues.
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