Fannie Mae economists are painting a much improved picture of the economy, with encouraging news in business investment, and manufacturing.
Housing however is a different story, it is struggling for traction, according to the company's September report. Activity improved in the third quarter with both single and multiple family housing starts rising in July for the first time in 3 months. The increase was attributed to multi family starts, which accounted for 40% of the starts. Multi family construction is not the strong contributor to the GDP as single family construction is.
Home sales were mixed in July. Existing home sales were strong, rising for the 4th straight month, with pending sales suggesting that sales would continue to rise through the quarter. Contract signing for new home purchases were week moving lower in July. The later is at odds with homebuilder confidence, which rose for the 3rd month in a row.
Home prices rose due in part to limited inventory, and a decline in distressed sales, which represented only 9% of transactions in July, compared to an average of 1/3 of all sales in 2009.
One positive note is that mortgage rates have recently stabilized near 2014 lows. The prediction overall is for the housing market to change little through the end of the year.