Economic Housing Activity Stymied by Shutdown

Doug Duncan, Fannie Mae’s chief economist, says the recent turmoil in the nation’s capital may impact consumer confidence but he does not anticipate it will have a lasting impact on the housing recovery. While Duncan sees consumer spending as being more modest in the third quarter, he says interest rates will average 3.3 percent in the fourth quarter, according to housingwire, and five percent a year from now. Despite rising mortgage rates, existing home sales rose to their highest level in six months, and builder confidence, while not great, is good. MHProNews understands the mortgage market took a soft blow during the government shutdown. With limited staff, the Federal Housing Administration (FHA) continued processing loans and delegated lenders continued to endorse new loans, resulting in less of a backup now that the shutdown is over. However, investors may be gun shy because of economic uncertainty and slowing economic activity; plus, full year economic growth expectations will come in lower than originally anticipated.

(Image credit: housingwire)

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