Total home sales declined -11% y/y during 2Q22 as the 30-year fixed rate mortgage increased from 3% during 2Q21 to 5.2% in 2Q22. The number of single-family mortgage originations declined -42% during this same period.
Fannie Mae is forecasting that total home sales will decline -16% y/y during the full-year 2022 and another -10% during 2023. Of course, this depends on what the Fed does in terms of going forward rate hikes. Notably, these Fannie Mae forecasts are based upon a decline in mortgage rates from here! This is inconsistent with what we are hearing from the Fed. While the current target range for the Federal Funds Rate is 2.25% to 2.50% (after two 75 bps hikes), some Fed officials are saying the rate needs to get to 3.4% to 4%+. Not good for home sales or the economy!