Fannie Mae predicts builders will expand production more than previously expected due to a strong labor market and robust consumer spending.
After increasing just over 1% annually this year, growth in single-family housing starts will accelerate to 10% during 2020 and top 1 million new homes in 2021, Fannie Mae's Economic and Strategic Research Group predicts.
Fannie Mae's Economic and Strategic Research Group predicts builders will expand production more than previously expected, due to a strong labor market and robust consumer spending. Low mortgage rates will also help. "It will likely take several years, even at a more robust pace, for new construction to address the existing pent-up demand for additional housing, as suggested by a still-increasing share of 25- to 34 year-olds living at home with their parents," according to the report.
The increase in construction, however, is unlikely to ease the overall housing shortage. Researchers at Fannie Mae are predicting a modest decline in existing home sales through the third quarter of 2020, due to the shortage of listings.
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