Although the housing market is starting to pick up speed after a slow start to the year, little hope remains for it to come close to the major housing numbers seen in 2013, according to Fannie Mae’s most recent housing report.
“We remain confident that the first-quarter drop in activity will reverse, and we are seeing some positive signs in the current quarter, but economic growth likely will be playing catch-up for the rest of the year,” said Fannie Mae Chief Economist Doug Duncan.
Between disruptive weather, a rare drop in real exports and the reversal of an unsustainable buildup in inventory investment that subtracted 1.6 percentage points from GDP in the first quarter, the housing economy took a hit at the start of 2014.
Fannie Mae predicts that all of 2014 will witness an economic growth of 2.1%, one half of a percentage point below the 2013 pace.
“Although incoming data show a pickup in activity heading into the current quarter, any strength during the remainder of the year is not expected to be enough to overcome the weakness in the first quarter,” Duncan said.
These four housing indicators explain why. (click the next page for the 4 indicators)