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  • Writer's pictureDistinctive Mortgages

Fannie: Home sales to drop 15% due to coronavirus, refis gain steam.

New commentary from the Fannie Mae Economic and Strategic Research (ESR) Group is projecting a near-15% decline in home sales in 2020 as the coronavirus pandemic continues to take its toll on the American economy. The government-sponsored enterprise now forecasts an annual rate of 5.14 million total home sales for the year, down 14.7% from 2019. Much of that decline is projected to come from existing-home sales, which Fannie anticipates will fall to an annual rate of 4.54 million units — down 15.0% from the prior year. New-home sales are expected to drop to an annual rate of 601,000 units, an 11.9% year-over-year decline. Projected home sales for 2020’s second quarter — usually the active spring buying season — are also down, decreasing to an annual rate of 4.20 million. That’s down 29.5% from the same quarter last year, and down 34.2% from the strong first quarter that opened 2020. That home sales pullback is expected to translate into a retreat in purchase originations from $1.28 trillion in 2019 to $1.11 trillion in 2020.

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