The agency's May 2011 Economic Outlook report relayed that housing starts and new home sales figures were flat during the first quarter of 2011. Single-family homebuilding was also weak during the quarter, which suggests continued optimism for the market is hard to achieve.
Furthermore, the economy experienced some declines during the first quarter, with the growth rate moving down from 3.1 percent during the last quarter of 2010 to 1.8 percent during the year's first several months.
"In spite of the positives surrounding the housing market, we see that consumers are still hesitant to take on a large financial obligation," said Doug Duncan, Fannie Mae's chief economist. "Nevertheless, we do forecast some improvement in home sales over the course of 2011 compared to 2010."
Continued success for unemployment rates could be one area that improves consumer confidence, and thus, the real estate market. Recent first-time unemployment application figures are down from the past several weeks.
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