Freddie Mac recently released its U.S. Economic and Housing Market Outlook for October showing that the federal government shutdown, debt ceiling issues, and the slowing economy — including the severely depressed level of new home construction — are slowing the housing recovery heading into the fourth quarter of the year.
“The housing recovery keeps chugging along despite a constant barrage of disruptions to the broader economy,” says Frank Nothaft, Freddie Mac vice president and chief economist. “We’re likely going to see the housing recovery slow down, but not shut down, as we close out the rest of this year due to tight inventories in many markets, rising mortgage rates and slumping consumer confidence. Fortunately, the housing recovery should continue to absorb the economic shocks in stride and improve next year.”
• By the end of the year, expect mortgage rates to be around the 4.3 percent level, and head higher in 2014.
• Due to the government shutdown, we’ve revised down fourth quarter growth projections by 0.5 percent.