In Berson’s Weekly Commentary [Fannie Mae] he looks ahead to 2006. These are fairly general predictions.
2005
* 5th consecutive year of record home sales
* 2nd consecutive year of double-digit home price gains.
yet…
* the economy grew at just above a trend rate despite skyrocketing energy prices, the devastation caused by hurricanes in the Gulf region, and higher interest rates.
2006
* modest gains in mortgage rates
* investors will pullout from market
* solid job market
* decline in housing sales but still near record
* investors will pullout from market
* decline in mortgage volume
Of course Fannie Mae caveats the heck out of these predictions but they all sound reasonable. The caveats are what intrigued me and include: “another jump in energy prices (particularly one that is sustained), a flu pandemic, significant terrorist activity in the U.S., and a sharp reduction in the demand for dollar-denominated assets on the part of foreign investors.” Does he know something we don’t know?
Tags: Hurricane
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