Housing area in '02 will be stable: Fannie Mae economist
WASHINGTON -- Leading U.S. mortgage finance firm Fannie Mae's chief economist is predicting a strong coming year for housing as the current year has been.
The recession has had little negative impact on housing because low interest rates have offset declines in consumer confidence stemming from job worries and the aftermath of the Sept. 11 attacks, said Fannie Mae's David Berson. He said the coming year should bring a gradual resumption of growth that gains steam in the last six months, he said.
"A pickup in the economy next year will be positive for housing activity, although this will be partially offset by higher mortgage rates," he said.
Because housing indicators -- new and existing home sales, housing starts and mortgage finance activity -- have remained relatively strong despite the recession, they are unlikely to soar once the recovery begins, Berson said. Instead, they should remain at near-record levels.
Berson is forecasting that surging refinancing would continue into early 2002. Originations could be slowed if interest rates rose but are still likely to be on track for a strong year, he said, while home values are likely to rise at a more moderate pace, around 3.5 percent to 4 percent, instead of this year's gains of more than 9 percent.