• Corporate
  • News
  • Fannie Mae: Upbeat Outlook for New Home Construction in 2020

Fannie Mae: Upbeat Outlook for New Home Construction in 2020

  • December 31, 2019

CMG image

Fannie Mae’s Economic and Strategic Research Group revised its expectations for the 2020 housing market.   The researchers predict single-family housing starts will accelerate 10% in 2020 after just a 1% growth this year.  Home buyers in many markets are competing over a limited number of existing homes for sale and turning to newly constructed homes. 

Existing home sales or resales usually make up the majority of real estate transactions accounting for about 90% of sales versus the 10% of new home sales.  However, with fewer homeowners moving, there are less and less homes available for sale.  Even with new home construction picking up, the report stated, “It will likely take several years, even at a more robust pace, for new construction to address the existing pent-up demand for additional housing, as suggested by a still-increasing share of 25- to 34 year-olds living at home with their parents.”

One of the advantages of building a new home over buying an existing home, is that you get to pick everything you want, including fixtures, flooring, and floorplan.  New homes will also come with the newest appliances, many of which are more energy efficient and come with warranties.  New homes are usually more expensive than existing homes, but when you buy an existing home with older fixtures and appliances, you may incur the cost of upgrading the home. 

Fannie Mae chief economist, Doug Duncan commented on the report, “we now expect single-family housing starts and sales of new homes to increase substantially, aided by a large uptick in new construction as builders work to replenish inventories drawn down by the recent surge in new home sales activity. 

When you’re buying a new home, it’s important to work with a lender that is experienced with new construction projects.  We offer extended rate lock programs to secure financing for up to six months of construction.  This longer timeline gives you greater flexibility during the construction process and protects you from unexpected incidents that may slow down home construction.  Our experience with national builders around the country has allowed us to establish a proven process for new home and construction lending. 

 

Sources: CNBC

  • Facebook Icon
  • Linked In Icon
  • Twitter Icon
  • Google Plus Icon

Latest Tweets

© CMG Financial, All Rights Reserved. CMG Financial is a registered trade name of CMG Mortgage, Inc., NMLS ID #1820 in most, but not all states. CMG Mortgage, Inc. is an equal opportunity lender with corporate office located at 3160 Crow Canyon Road, Suite 400, San Ramon, CA 94583 888-264-4663. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act No. 4150025; AK #AK1820; AZ #0903132; Colorado regulated by the Division of Real Estate; Georgia Residential Mortgage Licensee #15438; Illinois Residential Mortgage Licensee; Kansas Licensed Mortgage Company #MC.0001160; Massachusetts Mortgage Broker and Lender #MC1820; Mississippi Licensed Mortgage Company Licensed by the Mississippi Department of Banking and Consumer Finance; Licensed by the New Hampshire Banking Department; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker – NYS Department of Financial Services; Ohio Mortgage Broker Act Mortgage Banker Exemption #MBMB.850204.000; Licensed by the Oregon Division of Financial Regulation #ML-3000; Rhode Island Licensed Lender #20142986LL; and Licensed by the Virginia State Corporation Commission #MC-5521. CMG Mortgage, Inc. is licensed in all 50 states and the District of Columbia. Offer of credit is subject to credit approval. For information about our company, please visit us at www.cmgfi.com. To verify our complete list of state licenses, please visit www.cmgfi.com/corporate/licensing and NMLS Consumer Access (http://www.nmlsconsumeraccess.org/EntityDetails.aspx/COMPANY/1820).