Fannie Mae on Wednesday cut its forecast for home sales in the second and third quarters of 2021, blaming a lack of listings and a slowing pace of new construction.
The No. 1 U.S. mortgage financing agency said in a press release that its Economic and Strategic Research Group sees home sales at 6.6 million and 6.5 million in the second and third quarters, respectively.
That is down from its previous forecast of 6.9 million and 6.7 million home sales respectively in the periods.
Supply-side factors are limiting construction and mortgage origination, Fannie Mae said.
U.S. homebuilder confidence in the market for single family homes fell in June to its lowest level since August 2020, dented by higher housing costs and shortages in key materials such as lumber, the NAHB/Wells Fargo Housing Market index showed on Tuesday.
“Demographic factors remain favorable for a strong housing market and many of the supply constraints that homebuilders face are likely to persist in the near term, so this upward pricing pressure is not likely to be as transitory as many of the current inflation drivers,” Doug Duncan, Fannie Mae Senior Vice President and Chief Economist, said in the press release.
(Reporting by Noel Randewich; Editing by Dan Grebler)