Daily Newsletter: Fannie Mae Fore casts a “Return to 'New' Normal”

Fannie Mae’s Economic & Strategic Research (ESR) Group writes that it expects 2022 to be a year “of transition for both the economy and the housing market.” While it hedges its bet as to whether COVID-19 will end any time soon, it expects the market and policy choices driven by the pandemic to be gradually be replaced by more typical pre-COVID economic and housing patterns. This won’t happen overnight, and the group says the changes may never be completely reversed. Alterations to work, school, and housing arrangements may prove to be long-lasting and even though inflation is expected to slow, it may remain higher than the pre-COVID range for the foreseeable future. That said, this month’s economic commentary from the ESR describes the year ahead as ‘returning to a 'new' normal.” With unemployment below 4 percent and the Federal reserve expected to increase rates starting in March, the economy appears to be entering the mature stage of the business cycle, during which growth decelerates toward the long-run trend. Labor demand and the need to rebuild inventories should mean solid economic growth in 2022, but the period of rapid recovery has passed. The group expects improvement to supply chain difficulties , but risks around how fast this occurs, the duration of continued high inflation, and policy maker and financial market reactions to these economic conditions remain. Recent economic forecasts from Fannie Mae have been notable for many revisions to economic and housing predictions, usually moving the metrics higher. January’s report, they say, contains only modest changes. GPA growth in 2021 is still expected to be 5.5 percent, the highest since 1984, but the growth this year has been lowered 0.1 point to 3.1 percent with 2023 still expected at 2.2 percent. Recent inflation data has likewise been in line with the prior forecast, so related adjustments have also been modest.

January 20, 2022 Housing News Fannie Mae Forecasts a “Return to 'New' Normal” Fannie Mae’s Economic & Strategic Research (ESR) Group writes that it expects 2022 to be a year “of transition for both the economy and the housing market.” While it hedges its bet as to whether COVID-19 will end any time soon, it expects the mar... (read more) Housing News 2021 Existing Home Sales Set Post Crash Record Despite December Slide Existing home sales dropped in December, snapping a three-month streak of increases. The National Association of Realtors® (NAR) said the month’s sales of pre-owned single-family houses, townhouses, condos, and cooperative apartments fell 4.6 percen... (read more) Rob Chrisman Webinars Today; Training, Automation, Broker Tools; Write Up on MLO Purchase Focus While there’s plenty of chatter out there about the return of Better.com’s CEO to its helm, and its interesting business model how LOs are supposedly not paid for closed loans but for how many they lock, I could tell that my cat Myrtle was miffed a f... (read more) Mortgage Rates Mortgage Rates Leveling Off at Long-Term Highs Today was one of the most uneventful days in recent memory for mortgage rates. The average lender is in very similar territory compared to yesterday, and there has been far less intraday volatility through 3pm E.T. While things may be ho-hum over the past 2 days, rates are still in bad shape compared to most of the past 2 years. In jus... (read more) 30 Yr. Fixed Rate 3.69% -0.01% Rate Change Points Mortgage News Daily 30 Yr. Fixed 3.69% -0.01 0.40 15 Yr. Fixed 2.95% -0.01 0.40 30 Yr. FHA 3.33% -0.02 0.00 30 Yr. Jumbo 3.34% 0.00 0.00 5/1 ARM 3.62% -0.03 0.50 Updates Daily - Last Update: 1/20 15 Yr. Fixed Rate 2.95% -0.01% Rate Change Points Freddie Mac 30 Yr. Fixed 3.56% +0.11 0.70 15 Yr. Fixed 2.79% +0.17 0.60 5/1 Yr. ARM 2.60% +0.03 0.30 Updates Weekly - Last Update: 1/20 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 3.64% +0.12 0.45 15 Yr. Fixed 2.95% +0.22 0.43 30 Yr. Jumbo 3.54% +0.12 0.47 Updates Weekly - Last Update: 1/19 MBS / Treasuries MBS Live Recap: Still Waiting on Fed Above All Else Still Waiting on Fed Above All Else Bonds enjoyed another day of modest improvement on Thursday. On the plus side, gains are good. On the other hand, the pattern looks eerily similar to last week's (i.e. a few days of consolidation before more weakness). It's good to remember that recent weakness is... (read more) UMBS 30YR 3.0 102.00 +0.19 Price / Yield Change MBS UMBS 3.0 102.00 +0.19 UMBS 3.5 104.27 +0.06 GNMA 3.0 102.03 +0.25 GNMA 3.5 103.39 +0.17 Pricing as of: 1/20 5:21PM EST 10 Year US Treasury 1.8060 -0.0479 Price / Yield Change US Treasury 2 YR Treasury 1.033 -0.018 5 YR Treasury 1.590 -0.050 7 YR Treasury 1.753 -0.054 10 YR Treasury 1.806 -0.048 30 YR Treasury 2.121 -0.052 Pricing as of: 1/20 5:21PM EST Latest Video Fed's doves vs. Fed hawks—who will win out in the end? December existing home sales down 7.1 percent year-over-year The 9am Bond Report - January 20, 2022 The 2pm Bond Report - January 19, 2022 Around the Web jchs.harvard.edu Boom in Home Remodeling May Peak in 2022 Fannie Mae The Economy and Housing to Turn Toward 'New Normal' in 2022 zillow.com Zillow December 2021-December 2022 Home Value & Sale Forecast CNBC Homebuyers are rushing to get mortgages before higher rates price them out CNBC Jobless claims jump to 286,000, highest level since October Reuters Market, Omicron risks pose new challenge for Fed policy pivot CNBC Fed releases long-awaited study on a digital dollar, but doesn't take a position yet on creating one Calculated Risk Blog More Analysis on December Existing Home Sales Calculated Risk Blog NAR: Existing-Home Sales Decreased to 6.18 million in December CNBC 10-year Treasury yield rises slightly, hovers above 1.83% CNBC 86% of last year's new investors plan to put even more money in stocks in 2022, survey says Calculated Risk Blog Housing Starts Increased to 1.702 million Annual Rate in December Calculated Risk Blog AIA: "Architecture firms end 2021 on a strong note" in December

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