The federal government shutdown, the debt-ceiling crisis and the economy and slowed the housing recovery, according to U.S. Economic and Housing Market Outlook for October released Tuesday morning by Freddie Mac.
From the report:
>> 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.
>> Inventories remain tight at a 5 months’ supply as of September due to negative equity, a declining supply of distressed sales and a severely depressed level of new construction.
>> Expect the U.S. economy to add less than 1 million housing units in 2013 and around 1.15 million in 2014, significantly below normal levels.
>> Construction employment is 1 to 2 million jobs below trend levels, which is roughly 1 year of non-farm payroll growth at current levels.
>> Expect the ramping up of residential construction to take a while, and while economic growth will improve over the next year, the economy won’t be operating at full potential until sometime after 2015.