Fannie Mae economists downgraded their outlook for the 2014 housing market on Monday, blaming winter weather and the now-realized expectations that the Federal Reserve would ease its stimulus programs.
Fannie Mae officials said that in the first six months of the year, total housing sales fell below last year’s pace.
{mosads}“Additionally, on the demand side, there appears to be a conservatism among consumers and their willingness to take on big-ticket purchases, such as homes,” Fannie Mae said in its August 2014 Economic Outlook report.
“We currently estimate that 2014 will finish lower in total sales figures than 2013 — and that 2015, while stronger than 2013 and 2014, will not be the breakout year some are expecting.”
Fannie Mae chief economist Doug Duncan blamed the sluggish housing recovery on a cold winter, and expectation that the Federal Reserve would begin tapering, saying that it “led to very little seasonal growth in housing.”
The Federal Reserve each month this year has cut back its bond-buying program by $10 billion.
Fannie Mae officials noted that the economy as a whole still seems to be improving, six years out of the financial meltdown.
They predicted GDP would grow by 3 percent in the second half of 2014, and raised their forecast for all of 2014 by four-tenths of a point to 1.9 percent.