WASHINGTON — June 13,
2013 — A strengthening housing market is pushing the economy forward, but
steady economic growth is still a ways off, according to Fannie Mae's midyear
outlook.
Fiscal headwinds are expected to keep growth to below 2 percent for the first half of the year, with gradual strengthening in the second half of 2013 and into 2014. However, as fiscal drags wane, growth should continue to move in the positive direction amid an ongoing recovery in housing, rising household wealth, and expanded energy production.
"At the outset of the year, we forecasted that 2013 would witness sustainable but below-par growth as the economy begins its transition to more normal levels. Halfway through the year, our view is little changed," says Fannie Mae Chief Economist Doug Duncan. "We expect approximately 2.1 percent growth over the course of 2013, up from the anemic pace of 1.7 percent in 2012. This is consistent with the incremental improvement seen over the past few years but still below the economy's potential. Our forecast calls for growth to push past 2.5 percent in 2014, boosted largely by tailwinds from the strengthening housing market."
Housing was largely positive entering the spring/summer season, with various indicators such as home prices, home sales, and homebuilding activity showing signs of long-term improvement toward normal levels. Despite rising mortgage rates during the past month, which have affected refinance originations, affordability conditions remain high and should not present a significant obstacle to potential homebuyers.
Fiscal headwinds are expected to keep growth to below 2 percent for the first half of the year, with gradual strengthening in the second half of 2013 and into 2014. However, as fiscal drags wane, growth should continue to move in the positive direction amid an ongoing recovery in housing, rising household wealth, and expanded energy production.
"At the outset of the year, we forecasted that 2013 would witness sustainable but below-par growth as the economy begins its transition to more normal levels. Halfway through the year, our view is little changed," says Fannie Mae Chief Economist Doug Duncan. "We expect approximately 2.1 percent growth over the course of 2013, up from the anemic pace of 1.7 percent in 2012. This is consistent with the incremental improvement seen over the past few years but still below the economy's potential. Our forecast calls for growth to push past 2.5 percent in 2014, boosted largely by tailwinds from the strengthening housing market."
Housing was largely positive entering the spring/summer season, with various indicators such as home prices, home sales, and homebuilding activity showing signs of long-term improvement toward normal levels. Despite rising mortgage rates during the past month, which have affected refinance originations, affordability conditions remain high and should not present a significant obstacle to potential homebuyers.
Six ways a home may turn off buyers
Bankrate.com recently
featured a list of the top ways buyers back away from a home listed for sale.
Its list includes these items, among others:
1. Dirt: “The No. 1 biggest mistake is not getting the home in the best possible condition. That’s huge,” says Chad Goldwasser of Goldwasser Real Estate in Austin, Texas. “I won’t even represent sellers at this point unless they are fully aware of how important it is to get their home in the absolute best condition that they’ve ever had it in.” Goldwasser suggests also steam-cleaning tile and grout and carpets and replacing carpets if necessary.
2. Odors: “Odors are a big one, especially kitchen odors,” says Julie Dana, co-author of The Complete Idiot’s Guide to Staging Your Home to Sell. “I advise my clients not to cook fried food, fish, or greasy food while the house is on the market. ... Interestingly, next to the kitchen, the smelliest room in the house is actually the living room. That’s typically the room that has the most fabric, so that is where odors get absorbed.” She recommends having curtains and upholstery cleaned, particularly if someone in the home is a smoker, and taking steps to eliminate any pet odors.
3. Old fixtures: “You need to change out old fixtures in your house,” Goldwasser says, adding outdated ceiling fans and light fixtures should be replaced prior to listing a home. “New cabinet hardware and doorknobs will probably cost all of $400 or $500, but it makes a huge difference.”
4. Wallpaper: When buyers see wallpaper, they think of another thing to add to their to-do list, says Dana. “Wallpaper is extremely personalized. You’ve spent hours looking over books to pick out the wallpaper you want,” she says. “What are the odds that the person walking in the door will also like that wallpaper that you picked out?”
5. Popcorn acoustic ceilings: These ceiling were popular in the 1960s and 1970s but now can date a home. Still, it can be a mess and costly to remove, so real estate professionals say sellers may need to be prepared to credit a buyer in certain markets if they decide to keep the popcorn ceiling when selling a home.
6. Too many personal items: Cluttered homes make it difficult for buyers to see past the home owner’s belongings and start envisioning themselves there. “Anything that makes your house scream ‘you’ is what you don’t want,” Dana says. “I tell all my clients that how we decorate to live and how we decorate to sell are different, and right now, we’re decorating to sell.”
1. Dirt: “The No. 1 biggest mistake is not getting the home in the best possible condition. That’s huge,” says Chad Goldwasser of Goldwasser Real Estate in Austin, Texas. “I won’t even represent sellers at this point unless they are fully aware of how important it is to get their home in the absolute best condition that they’ve ever had it in.” Goldwasser suggests also steam-cleaning tile and grout and carpets and replacing carpets if necessary.
2. Odors: “Odors are a big one, especially kitchen odors,” says Julie Dana, co-author of The Complete Idiot’s Guide to Staging Your Home to Sell. “I advise my clients not to cook fried food, fish, or greasy food while the house is on the market. ... Interestingly, next to the kitchen, the smelliest room in the house is actually the living room. That’s typically the room that has the most fabric, so that is where odors get absorbed.” She recommends having curtains and upholstery cleaned, particularly if someone in the home is a smoker, and taking steps to eliminate any pet odors.
3. Old fixtures: “You need to change out old fixtures in your house,” Goldwasser says, adding outdated ceiling fans and light fixtures should be replaced prior to listing a home. “New cabinet hardware and doorknobs will probably cost all of $400 or $500, but it makes a huge difference.”
4. Wallpaper: When buyers see wallpaper, they think of another thing to add to their to-do list, says Dana. “Wallpaper is extremely personalized. You’ve spent hours looking over books to pick out the wallpaper you want,” she says. “What are the odds that the person walking in the door will also like that wallpaper that you picked out?”
5. Popcorn acoustic ceilings: These ceiling were popular in the 1960s and 1970s but now can date a home. Still, it can be a mess and costly to remove, so real estate professionals say sellers may need to be prepared to credit a buyer in certain markets if they decide to keep the popcorn ceiling when selling a home.
6. Too many personal items: Cluttered homes make it difficult for buyers to see past the home owner’s belongings and start envisioning themselves there. “Anything that makes your house scream ‘you’ is what you don’t want,” Dana says. “I tell all my clients that how we decorate to live and how we decorate to sell are different, and right now, we’re decorating to sell.”
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